`[Federal Register Volume 89, Number 243 (Wednesday, December 18, 2024)]
[Rules and Regulations]
[Pages 103054-103200]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-29354]



[[Page 103053]]

Vol. 89

Wednesday,

No. 243

December 18, 2024

Part II





Department of Homeland Security





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8 CFR Part 214





Modernizing H-1B Requirements, Providing Flexibility in the F-1 
Program, and Program Improvements Affecting Other Nonimmigrant Workers; 
Final Rule

  Federal Register / Vol. 89 , No. 243 / Wednesday, December 18, 2024 / 
Rules and Regulations  

[[Page 103054]]


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DEPARTMENT OF HOMELAND SECURITY

8 CFR Part 214

[CIS No. 2766-24; DHS Docket No. USCIS-2023-0005]
RIN 1615-AC70


Modernizing H-1B Requirements, Providing Flexibility in the F-1 
Program, and Program Improvements Affecting Other Nonimmigrant Workers

AGENCY: U.S. Citizenship and Immigration Services, Department of 
Homeland Security (DHS).

ACTION: Final rule.

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SUMMARY: The U.S. Department of Homeland Security (DHS) is issuing this 
final rule to modernize and improve the efficiency of the H-1B program, 
add benefits and flexibilities, and improve integrity measures. These 
provisions mainly amend the regulations governing H-1B specialty 
occupation workers, although some of the provisions narrowly impact 
other nonimmigrant classifications, including: H-2, H-3, F-1, L-1, O, 
P, Q-1, R-1, E-3, and TN.

DATES: This final rule is effective January 17, 2025.

FOR FURTHER INFORMATION CONTACT: Charles L. Nimick, Chief, Business and 
Foreign Workers Division, Office of Policy and Strategy, U.S. 
Citizenship and Immigration Services, U.S. Department of Homeland 
Security, 5900 Capital Gateway Drive, Camp Springs, MD 20746; telephone 
(240) 721-3000.

SUPPLEMENTARY INFORMATION: 

Table of Contents

I. Executive Summary
    A. Purpose of the Regulatory Action
    B. Summary of the Major Provisions of the Regulatory Action
    1. Clarifying Requirements and Improving Program Efficiencies
    2. Providing Greater Benefits and Flexibilities
    3. Strengthening Program Integrity
    C. Summary of Costs and Benefits
    D. Summary of Changes from the Notice of Proposed Rulemaking
    1. Specialty Occupation Definition and Criteria
    2. Bar on Multiple Registrations Submitted by Related Entities
    3. Contracts
    4. Non-speculative or Bona Fide Employment
    5. Beneficiary-Owners
    6. Additional Changes
II. Background
    A. Legal Authority
    B. The H-1B Program
    C. The F-1 Program
    D. NPRM and Final Rules
III. Response to Public Comments on the Proposed Rule
    A. Summary of Public Comments on the Proposed Rule
    B. DHS/USCIS Statutory and Legal Issues
    C. General Comments
    1. General Support for the Rule
    2. General Opposition to the Rule
    3. Other General Comments on the Rule
    D. Modernization and Efficiencies
    1. General Comments on the Proposed Modernization and 
Efficiencies Provisions
    2. Specialty Occupation Definition and Criteria
    i. General comments on the proposed changes to ``specialty 
occupation''
    ii. Amending the Definition of ``Specialty Occupation''
    iii. Amending the Criteria for ``Specialty Occupation''
    3. Amended Petitions
    4. Deference
    5. Evidence of Maintenance of Status
    6. Eliminating the Itinerary Requirement for H programs
    7. Validity Expires Before Adjudication
    E. Benefits and Flexibilities
    1. H-1B Cap Exemptions
    2. Automatic Extension of Authorized Employment Under 8 CFR 
214.2(f)(5)(vi) (Cap-Gap)
    3. Other Comments on Benefits and Flexibilities
    F. Program Integrity
    1. Provisions to Ensure Bona Fide Job Offer for a Bona Fide 
Specialty Occupation Position
    i. Contracts
    ii. Bona Fide Employment
    iii. LCA Properly Corresponds with the Petition
    iv. Revising the Definition of U.S. Employer
    v. Employer-Employee Relationship
    vi. Bona Fide Job Offer
    vii. Legal Presence and Amenable to Service of Process
    2. Beneficiary-Owners
    3. Site Visits
    4. Third-Party Placement (Codifying Policy Based on Defensor v. 
Meissner (5th Cir. 2000))
    5. Other Comments on Program Integrity and Alternatives
    G. Request for Preliminary Public Input Related to Future 
Actions/Proposals
    1. Use or Lose
    2. Beneficiary Notification
    H. Other Comments on the Proposed Rule
    I. Out of Scope
    J. Statutory and Regulatory Requirements
    1. Administrative Procedure Act
    2. Comments on the Regulatory Impact Analysis (RIA) (E.O. 12866 
and E.O. 13563)
    K. Severability
IV. Statutory and Regulatory Requirements
    A. Executive Order 12866 (Regulatory Planning and Review) and 
Executive Order 13563 (Improving Regulation and Regulatory Review)
    1. Summary of Changes from NPRM to Final Rule
    2. Background
    3. Costs, Transfers, and Benefits of the Final Rule
    i. Specialty Occupation Definition and Criteria
    ii. Amended Petitions
    iii. Deference to Prior USCIS Determinations of Eligibility in 
Requests for Extensions of Petition Validity
    iv. Evidence of Maintenance of Status
    v. Eliminating the Itinerary Requirement for H Programs
    vi. Validity Period Expires Before Adjudication
    vii. H-1B Cap Exemptions
    viii. Automatic Extension of Authorized Employment ``Cap-Gap''
    ix. Provisions to Ensure Bona Fide Job Offer for a Specialty 
Occupation Position
    a. Contracts
    b. Bona fide Employment
    c. LCA Corresponds with the Petition
    d. Revising the Definition of U.S. Employer
    e. Employer-Employee Relationship
    x. Beneficiary-Owners
    xi. Site Visits
    xii. Third-Party Placement (Codifying Policy Based on Defensor 
v. Meissner (5th Cir. 2000))
    4. Alternatives Considered
    5. Total Quantified Net Costs of the Final Regulatory Changes
    B. Regulatory Flexibility Act
    C. Final Regulatory Flexibility Act (FRFA)
    1. A statement of the need for, and objectives of, the rule
    2. A statement of the significant issues raised by the public 
comments in response to the IRFA, a statement of the assessment of 
the agency of such issues, and a statement of any changes made in 
the proposed rule as a result of such comments
    3. The response of the agency to any comments filed by the Chief 
Counsel for Advocacy of the Small Business Administration in 
response to the proposed rule, and a detailed statement of any 
change made to the proposed rule in the final rule as a result of 
the comments
    4. A description and an estimate of the number of small entities 
to which the rule will apply or an explanation of why no such 
estimate is available
    5. A description of the projected reporting, recordkeeping, and 
other compliance requirements of the rule, including an estimate of 
the classes of small entities that will be subject to the 
requirement and the types of professional skills necessary for 
prepration of the report or record
    6. A description of the steps the agency has taken to minimize 
the significant economic impact on small entities consistent with 
the stated objectives of applicable statutes, including a statement 
of the factual, policy, and legal reasons for selecting the 
alternative adopted in the final rule and why each of the other 
significant alternatives to the rule considered by the agency was 
rejected.
    D. Unfunded Mandates Reform Act of 1995 (UMRA)
    E. Congressional Review Act
    F. Executive Order 13132 (Federalism)
    G. Executive Order 12988 (Civil Justice Reform)

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    H. Executive Order 13175 (Consultation and Coordination with 
Indian Tribal Governments)
    I. National Environmental Policy Act (NEPA)
    J. Paperwork Reduction Act

Table of Abbreviations

AC21--American Competitiveness in the Twenty-first Century Act
ACWIA--American Competitiveness and Workforce Improvement Act of 
1998
BLS--Bureau of Labor Statistics
CEQ--Council on Environmental Quality
CFR--Code of Federal Regulations
CMSA--Consolidated Metropolitan Statistical Area
COS--Change of Status
CPI-U--Consumer Price Index for All Urban Consumers
DHS--U.S. Department of Homeland Security
DOL--U.S. Department of Labor
DOS--U.S. Department of State
FDNS--Fraud Detection and National Security
FR--Federal Register
FY--Fiscal Year
HR--Human Resources
HSA--Homeland Security Act of 2002
ICE--Immigration and Customs Enforcement
IMMACT 90--Immigration Act of 1990
INA--Immigration and Nationality Act
INS--legacy Immigration and Naturalization Service
IRFA--Initial Regulatory Flexibility Analysis
IRS--Internal Revenue Service
LCA--Labor Condition Application
MSA--Metropolitan Statistical Area
AICS--North American Industry Classification System
NEPA--National Environmental Policy Act
NOID--Notice of Intent to Deny
NPRM--Notice of Proposed Rulemaking
OIRA--Office of Information and Regulatory Affairs
OMB--Office of Management and Budget
OP&S--Office of Policy and Strategy
OPT--Optional Practical Training
PM--Policy Memorandum
PMSA--Primary Metropolitan Statistical Area
PRA--Paperwork Reduction Act
PRD--Policy Research Division
Pub. L.--Public Law
RFA--Regulatory Flexibility Act of 1980
RFE--Request for Evidence
RIA--Regulatory Impact Analysis
RIN--Regulation Identifier Number
SBA--Small Business Administration
SEVP--Student and Exchange Visitor Program
SOC--Standard Occupational Classification
Stat.--U.S. Statutes at Large
TLC--Temporary Labor Certification
UMRA--Unfunded Mandates Reform Act
U.S.C.--United States Code
USCIS--U.S. Citizenship and Immigration Services

I. Executive Summary

    DHS is amending its regulations by finalizing many of the 
provisions proposed in the ``Modernizing H-1B Requirements, Providing 
Flexibility in the F-1 Program, and Program Improvements Affecting 
Other Nonimmigrant Workers,'' notice of proposed rulemaking (NPRM), 
published in the Federal Register on October 23, 2023 (88 FR 72870). 
DHS previously finalized portions of the NPRM relating to H-1B 
registration in a separate final rule, ``Improving the H-1B 
Registration Selection Process and Program Integrity,'' published in 
the Federal Register on February 2, 2024 (89 FR 7456).

A. Purpose of the Regulatory Action

    The purpose of this rulemaking is to modernize and improve the H-1B 
program by: (1) clarifying the requirements of the H-1B program and 
improving program efficiency; (2) providing greater benefits and 
flexibilities for petitioners and beneficiaries; and (3) strengthening 
program integrity measures.

B. Summary of the Major Provisions of the Regulatory Action

1. Clarifying Requirements and Improving Program Efficiencies
    Through this rule, DHS is: (1) revising the regulatory definition 
and criteria for a position to be deemed a ``specialty occupation''; 
(2) clarifying that ``normally'' does not mean ``always'' within the 
criteria for a specialty occupation; and (3) clarifying that the 
petitioner may accept a range of qualifying degree fields as sufficient 
to qualify for the position, but the required field(s) must be directly 
related to the job duties in order for the position to be deemed a 
specialty occupation. See new 8 CFR 214.2(h)(4)(ii) and (h)(4)(iii)(A). 
DHS is also updating the regulations governing when an amended or new 
petition must be filed due to a change in an H-1B worker's place of 
employment to be consistent with current policy guidance. See new 8 CFR 
214.2(h)(2)(i)(E).
    Additionally, DHS is codifying its current deference policy to 
clarify that, when adjudicating a Form I-129, Petition for Nonimmigrant 
Worker, involving the same parties and the same underlying facts, 
adjudicators generally should defer to a prior USCIS determination on 
eligibility, unless a material error in the prior approval is 
discovered or other material change or information impacts the 
petitioner's, beneficiary's, or applicant's eligibility. See new 8 CFR 
214.1(c)(5). DHS is also updating the regulations to expressly require 
that evidence of the beneficiary's maintenance of status must be 
included with a petition seeking an extension or amendment of stay. See 
new 8 CFR 214.1(c)(6). This policy impacts all employment-based 
nonimmigrant classifications that use Form I-129, Petition for 
Nonimmigrant Worker. DHS is also eliminating the itinerary requirement, 
impacting all H classifications. See new 8 CFR 214.2(h)(2)(i)(B) and 
(F). Additionally, DHS is updating the regulations to allow petitioners 
to amend the initially requested validity periods (i.e., dates of 
employment) in cases where the petition is deemed approvable after the 
requested end date for employment has passed. See new 8 CFR 
214.2(h)(9)(ii)(D).

2. Providing Greater Benefits and Flexibilities

    DHS is modernizing regulatory definitions to provide additional 
flexibilities for nonprofit and governmental research organizations and 
petitions for certain beneficiaries who are not directly employed by a 
qualifying organization. These changes better reflect modern 
organizational and staffing structures for both nonprofit and 
nongovernmental research organizations. Specifically, through this 
rulemaking, DHS is changing the definition of ``nonprofit research 
organization'' and ``governmental research organization'' by replacing 
the terms ``primarily engaged'' and ``primary mission'' with 
``fundamental activity'' to permit nonprofit entities or governmental 
research organizations that conduct research as a fundamental activity, 
but are not primarily engaged in research or where research is not a 
primary mission, to meet the definition of a nonprofit research entity 
or governmental research organization for purposes of establishing 
exemption from the annual statutory limit on H-1B visas. Additionally, 
DHS is revising the regulations to recognize that certain beneficiaries 
may qualify for H-1B cap exemption when they are not directly employed 
by a qualifying organization, but still spend at least half of their 
time providing essential work that supports or advances a fundamental 
purpose, mission, objective, or function of the qualifying 
organization. See new 8 CFR 214.2(h)(8)(iii)(F)(2)(iv), 
(h)(8)(iii)(F)(4), (h)(19)(iii)(B)(4), and (h)(19)(iii)(C). DHS is also 
providing flexibility to students seeking to change their status to H-
1B by automatically extending the duration of their F-1 status, and any 
employment authorization granted under 8 CFR 274a.12(c)(3)(i)(B) or 
(C), until April 1 of the relevant fiscal year to avoid disruptions in 
lawful status and employment authorization while a petition requesting 
a change of status to

[[Page 103056]]

H-1B is pending. See new 8 CFR 214.2(f)(5)(vi)(A).
3. Strengthening Program Integrity
    DHS is strengthening the integrity of the H-1B program through this 
rulemaking by: (1) requiring that the petitioner establish that it has 
a bona fide position in a specialty occupation available for the 
beneficiary as of the requested start date; (2) codifying its authority 
to request contracts or similar evidence to determine if the position 
is bona fide; (3) ensuring that the LCA supports and properly 
corresponds to the petition; (4) revising the definition of ``United 
States employer'' by codifying current DHS policy that the petitioner 
have a bona fide job offer for the beneficiary to work within the 
United States as of the requested start date; and (5) adding a 
requirement that the petitioner have a legal presence and be amenable 
to service of process in the United States. See new 8 CFR 
214.2(h)(4)(i)(B)(1), (h)(4)(ii), and (h)(4)(iv)(C) and (D).
    DHS is also clarifying that certain owners of the petitioning 
entity may be eligible for H-1B status (``beneficiary-owners''), while 
setting reasonable parameters around H-1B eligibility when the 
beneficiary owns a controlling interest in the petitioning entity. For 
example, USCIS will limit the validity of the initial H-1B petition and 
first extension to 18 months each. See new 8 CFR 214.2(h)(9)(iii)(E).
    DHS is also codifying USCIS' authority to conduct site visits and 
clarifying that refusal to comply with site visits may result in denial 
or revocation of the petition. See new 8 CFR 214.2(h)(4)(i)(B)(2). 
Additionally, DHS is clarifying that if an H-1B worker will be staffed 
to a third party, meaning they will be contracted to fill a position in 
the third party's organization, the work to be performed by the 
beneficiary for the third party must be in a specialty occupation, and 
it is the requirements of that third party, and not the petitioner, 
that are most relevant when determining whether the position is a 
specialty occupation. See new 8 CFR 214.2(h)(4)(i)(B)(3).

C. Summary of Costs and Benefits

    DHS analyzed two baselines for this final rule, the no action 
baselines and the without-policy baseline. The primary baseline for 
this final rule is the no action baseline. For the 10-year period of 
analysis of the final rule, DHS estimates the annualized net cost 
savings of this rulemaking will be $333,835 annualized at a 2 percent 
discount rate. DHS also estimates that there will be annualized 
monetized transfers of $1.4 million from newly cap-exempt petitioners 
to USCIS and $38.8 million from employers to F-1 workers, both 
annualized at a 2 percent discount rate.

D. Summary of Changes From the Notice of Proposed Rulemaking

    Following careful consideration of public comments received, this 
final rule adopts many of the provisions proposed in the NPRM, with 
revisions as described below.
1. Specialty Occupation Definition and Criteria
    In response to commenters' concerns, DHS is modifying the 
definition of specialty occupation from the proposed definition. After 
carefully considering the comments, DHS is not finalizing the proposed 
regulatory text, ``[t]he required specialized studies must be directly 
related to the position,'' as this language may be misread to conclude 
that USCIS would only consider a beneficiary's specialized studies in 
assessing whether the position is a specialty occupation. DHS is, 
however, retaining the ``directly related'' requirement in the 
definition of ``specialty occupation'' and related criteria, and is 
adding language clarifying that ``directly related'' means there is a 
logical connection between the degree or its equivalent, and the duties 
of the position.
    The specialty occupation definition also clarifies that although 
the position may allow for a range of qualifying degree fields, each of 
the fields must be directly related to the duties of the position.
    To address commenters' concerns about the potential for 
adjudicators to inappropriately rely solely on degree titles, DHS is 
removing the references to ``business administration'' and ``liberal 
arts.'' These changes recognize that the title of the degree alone is 
not determinative and that degree titles may differ among schools and 
evolve over time.
    DHS is also making some minor, non-substantive revisions to 8 CFR 
214.2(h)(4)(iii)(A), which include: changing the word ``are'' to ``is'' 
in 8 CFR 214.2(h)(4)(iii)(A)(4); revising 8 CFR 214.2(h)(4)(iii)(A)(2) 
from ``United States industry'' to ``industry in the United States''; 
and revising 8 CFR 214.2(h)(4)(iii)(A)(2) and (3) by adding ``to 
perform the job duties for'' rather than just the word ``position.''
2. Bar on Multiple Registrations Submitted by Related Entities
    DHS will not finalize the proposed change at 8 CFR 
214.2(h)(2)(i)(G) to expressly state in the regulations that related 
entities are prohibited from submitting multiple H-1B registrations for 
the same individual. On February 2, 2024, DHS published a final rule, 
``Improving the H-1B Registration Selection Process and Program 
Integrity,'' 89 FR 7456 (Feb. 2, 2024), creating a beneficiary-centric 
selection process for registrations by employers and adding additional 
integrity measures related to the registration process to reduce the 
potential for fraud in the H-1B registration process. In that final 
rule, DHS states that it ``intends to address and may finalize this 
proposed provision [expressly stating in the regulations that related 
entities are prohibited from submitting multiple registrations for the 
same individual] in a subsequent final rule,'' but that ``[m]ore time 
and data will help inform the utility of this proposed provision.'' 89 
FR 7456, 7469 (Feb. 2, 2024). Initial data from the FY 2025 H-1B 
registration process show a significant decrease in the total number of 
registrations submitted compared to FY 2024, including a decrease in 
the number of registrations submitted on behalf of beneficiaries with 
multiple registrations.\1\ This initial data indicate that there were 
far fewer attempts to gain an unfair advantage than in prior years 
owing, in large measure, to the implementation of the beneficiary-
centric selection process.\2\ Under the beneficiary-centric selection 
process, individual beneficiaries do not benefit from an increased 
chance of selection if related entities each submit a registration on 
their behalf. As such, DHS has decided not to finalize the proposed 
change pertaining to multiple registrations submitted by related 
entities.
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    \1\ USCIS, ``H-1B Electronic Registration Process,'' https://www.uscis.gov/working-in-the-united-states/temporary-workers/h-1b-specialty-occupations-and-fashion-models/h-1b-electronic-registration-process.
    \2\ USCIS, ``H-1B Electronic Registration Process,'' https://www.uscis.gov/working-in-the-united-states/temporary-workers/h-1b-specialty-occupations-and-fashion-models/h-1b-electronic-registration-process.
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3. Contracts
    In response to stakeholder comments, DHS is revising 8 CFR 
214.2(h)(4)(iv)(C) to state that USCIS may request contracts or similar 
evidence ``showing the bona fide nature of the beneficiary's 
position,'' rather than ``showing the terms and conditions of the 
beneficiary's work'' as stated in the NPRM. This revision is intended 
to clarify that USCIS will review contracts or similar evidence to 
determine if the position is bona fide.

[[Page 103057]]

4. Non-Speculative or Bona Fide Employment
    In response to a number of comments expressing concern with the 
term ``non-speculative,'' DHS is replacing ``non-speculative'' with 
``bona fide,'' so that new 8 CFR 214.2(h)(4)(iii)(F) will state, in 
relevant part, ``[a]t the time of filing, the petitioner must establish 
that it has a bona fide position in a specialty occupation available 
for the beneficiary as of the start date of the validity period as 
requested on the petition.'' This is not intended to be a substantive 
change, but to clarify what DHS meant by ``non-speculative.'' This 
provision is also consistent with current policy guidance that an H-1B 
petitioner must establish that the purported employment exists at the 
time of filing the petition and that it will employ the beneficiary in 
a specialty occupation.
    DHS is also adding to this provision, ``A petitioner is not 
required to establish specific day-to-day assignments for the entire 
time requested in the petition.'' While this was previously noted in 
the preamble to the NPRM, DHS believes adding this clarification to the 
regulatory text will help allay commenters' concerns and avoid future 
confusion.
5. Beneficiary-Owners
    In response to commenters' concerns about the term ``controlling 
interest'' in the regulatory text for beneficiary-owners, DHS is 
clarifying the term by defining it in the regulatory text, rather than 
only in the preamble. Specifically, DHS is adding to new 8 CFR 
214.2(h)(4)(ii) and (h)(9)(iii)(E), that a controlling interest means 
that the beneficiary owns more than 50 percent of the petitioner or 
that the beneficiary has majority voting rights in the petitioner.
6. Additional Changes
    Additionally, in 8 CFR 214.1(c)(1), DHS is revising the reference 
to the fee regulation from 8 CFR 103.7 to 8 CFR 106.2, to align with 
the updated regulatory changes made by the USCIS Fee Schedule Final 
Rule.\3\
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    \3\ See ``U.S. Citizenship and Immigration Services Fee Schedule 
and Changes to Certain Other Immigration Benefit Request 
Requirements,'' 89 FR 6194 (Jan. 31, 2024).
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II. Background

A. Legal Authority

    The authority of the Secretary of Homeland Security to make these 
regulatory amendments is found in various sections of the Immigration 
and Nationality Act (INA or the Act), 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 and establish such regulations as the Secretary deems necessary 
for carrying out such authority, 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.\4\ Further authority 
for these regulatory amendments is found in:
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    \4\ Although several provisions of the INA discussed in the NPRM 
refer exclusively to the ``Attorney General,'' such provisions are 
now to be read as referring to the Secretary of Homeland Security by 
operation of the HSA. See 6 U.S.C. 202(3), 251, 271(b), 542 note, 
557; 8 U.S.C. 1103(a)(1), (g), 1551 note; Nielsen v. Preap, 586 U.S. 
392, 397 n.2 (2019).
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     Section 101(a)(15) of the INA, 8 U.S.C. 1101(a)(15), which 
establishes classifications for noncitizens who are coming temporarily 
to the United States as nonimmigrants, including the H-1B 
classification, see INA sec. 101(a)(15)(H)(i)(b), 8 U.S.C. 
1101(a)(15)(H)(i)(b);
     Section 214(a)(1) of the INA, 8 U.S.C. 1184(a)(1), which 
authorizes the Secretary to prescribe, by regulation, the time 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 employer may 
petition for nonimmigrant workers, including certain nonimmigrants 
described at sections 101(a)(15)(H), (L), (O), and (P), 8 U.S.C. 
1101(a)(15)(H), (L), (O), and (P); the information that an employer 
must provide in the petition; and certain fees that are required for 
certain nonimmigrant petitions;
     Section 214(e) of the INA, 8 U.S.C. 1184(e), which 
provides for the admission of citizens of Canada or Mexico as TN 
nonimmigrants;
     Section 214(g) of the INA, 8 U.S.C. 1184(g), which, inter 
alia, prescribes the H-1B numerical limitations, various exceptions to 
those limitations, and the period of authorized admission for H-1B 
nonimmigrants;
     Section 214(i) of the INA, 8 U.S.C. 1184(i), which sets 
forth the definition and requirements of a ``specialty occupation'';
     Section 235(d)(3) of the INA, 8 U.S.C. 1225(d)(3), which 
authorizes ``any immigration officer'' . . . ``to administer oaths and 
to take and consider evidence of or from any person touching the 
privilege of any alien or person he believes or suspects to be an alien 
to enter, reenter, transit through, or reside in the United States or 
concerning any matter which is material and relevant to the enforcement 
of [the INA] and the administration of [DHS]'';
     Section 248 of the INA, 8 U.S.C. 1258, which authorizes a 
noncitizen to change from any nonimmigrant classification to any other 
nonimmigrant classification (subject to certain exceptions) if the 
noncitizen was lawfully admitted to the United States as a nonimmigrant 
and is continuing to maintain that status, and is not otherwise subject 
to the 3- or 10-year bar applicable to certain noncitizens who were 
unlawfully present in the United States;
     Section 274A(h)(3) of the INA, 8 U.S.C. 1324a(h)(3), which 
recognizes the Secretary's authority to extend employment authorization 
to noncitizens in the United States;
     Section 287(b) of the INA, 8 U.S.C. 1357(b), which 
authorizes the taking and consideration of evidence ``concerning any 
matter which is material or relevant to the enforcement of the [INA] 
and the administration of [DHS]'';
     Section 402 of the HSA, 6 U.S.C. 202, which charges the 
Secretary with ``[e]stablishing and administering rules . . . governing 
the granting of visas or other forms of permission . . . to enter the 
United States'' and ``[e]stablishing national immigration enforcement 
policies and priorities''; see also HSA sec. 428, 6 U.S.C. 236; and
     Section 451(a)(3) and (b) of the HSA, 6 U.S.C. 271(a)(3) 
and (b), transferring to USCIS the authority to adjudicate petitions 
for nonimmigrant status, establish policies for performing that 
function, and set national immigration services policies and 
priorities.

B. The H-1B 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 
secs. 101(a)(15)(H)(i)(b) and 214(i), 8 U.S.C 1101(a)(15)(H)(i)(b) and 
1184(i). Through the Immigration Act of 1990, Public Law 101-649, 
Congress set the current annual cap for the H-1B visa category at 
65,000,\5\ which limits the

[[Page 103058]]

number of beneficiaries who may be issued an initial H-1B visa or 
otherwise provided initial H-1B status each fiscal year.\6\ Congress 
provided an exemption from the numerical limits in INA sec. 
214(g)(1)(A), 8 U.S.C. 1184(g)(1)(A), for 20,000 initial H-1B visas, or 
grants of initial H-1B status, each fiscal year for foreign nationals 
who have earned a master's or higher degree from a U.S. institution of 
higher education (``advanced degree exemption'').\7\ Congress also set 
up exemptions to the annual H-1B cap for workers who will be employed 
at an institution of higher education (as defined in section 101(a) of 
the Higher Education Act of 1965, as amended) or a related or 
affiliated nonprofit entity, and workers who will be employed at a 
nonprofit or governmental research organization. These exemptions are 
not numerically capped. See INA sec. 214(g)(5)(A)-(B), 8 U.S.C. 
1184(g)(5)(A)-(B).
---------------------------------------------------------------------------

    \5\ Up to 6,800 visas are set aside from the 65,000 each fiscal 
year for the H-1B1 visa program under terms of the legislation 
implementing the U.S.-Chile and U.S.-Singapore free trade 
agreements. See INA secs. 101(a)(15)(H)(i)(b1), 214(g)(8), 8 U.S.C. 
1101(a)(15)(H)(i)(b1), 1184(g)(8).
    \6\ The 65,000 annual H-1B numerical limitation was increased 
for FYs 1999 through 2003. See INA sec. 214(g)(1)(A), 8 U.S.C. 
1184(g)(1)(A), as amended by section 411 of the American 
Competitiveness and Workforce Improvement Act of 1998 (ACWIA), 
Public Law 105-277, div. C, tit. IV, 112 Stat. 2681, and the 
American Competitiveness in the Twenty-first Century Act of 2000 
(AC21), Public Law 106-313, 114 Stat. 1251, as amended by the 21st 
Century Department of Justice Appropriations Authorization Act, 
Public Law 107-273, 116 Stat. 1758 (2002). Subsequent to IMMACT 90, 
Congress also created several exemptions from the 65,000 numerical 
limitation. See INA sec. 214(g)(5), 8 U.S.C. 1184(g)(5).
    \7\ See INA sec. 214(g)(5)(C), 8 U.S.C. 1184(g)(5)(C). This rule 
also may refer to the 20,000 exemptions under section 214(g)(5)(C) 
from the H-1B regular cap as the ``advanced degree exemption 
allocation,'' or ``advanced degree exemption numerical limitation.''
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C. The F-1 Program

    Section 101(a)(15)(F)(i) of the INA, 8 U.S.C. 1101(a)(15)(F)(i), 
permits bona fide students to be temporarily admitted to the United 
States for the purpose of pursuing a full course of study at an 
established college, university, seminary, conservatory, academic high 
school, elementary school, or other academic institution or accredited 
language training program. Principal applicants are categorized as F-1 
nonimmigrants and their spouses and minor children may accompany or 
follow to join them as F-2 dependents.
    In 1992, legacy Immigration and Naturalization Service (INS) 
amended its longstanding regulations relating to an employment program 
for students called Optional Practical Training (OPT) such that 
students in F-1 nonimmigrant status who have been enrolled on a full-
time basis for at least one full academic year in a college, 
university, conservatory, or seminary (which now must be certified by 
U.S. Immigration and Customs Enforcement's (ICE) Student and Exchange 
Visitor Program (SEVP)) are allowed up to 12 months of OPT to work for 
a U.S. employer in a job directly related to the student's major area 
of study.\8\ 8 CFR 214.2(f)(10). Employers of F-1 students under OPT 
often file petitions to change the students' status to H-1B so that 
they may continue working in their current or a similar job after 
completion of OPT. Many times, however, an F-1 student's OPT 
authorization would expire prior to the student being able to assume 
the employment specified in the approved H-1B petition, creating a gap 
in employment. In order to remedy this, in 2008, DHS created the ``cap-
gap'' extension to temporarily extend the period of authorized stay and 
work authorization of certain F-1 students caught in the gap between 
the end of their OPT and the start date on their later-in-time 
approved, cap-subject H-1B petition.\9\ 8 CFR 214.2(f)(5)(vi)(A). The 
cap-gap extension provides a temporary bridge between F-1 and H-1B 
status, allowing students to remain in the United States between the 
end of their academic program and the beginning of the fiscal year, 
when the student's H-1B visa status commences. DHS subsequently amended 
the cap-gap provisions by extending the authorized period of stay and 
work authorization of any F-1 student who is the beneficiary of a 
timely filed cap-subject H-1B petition that has been granted by, or 
remains pending with, USCIS, until October 1 of the fiscal year for 
which H-1B visa classification has been requested.\10\ 8 CFR 
214.2(f)(5)(vi)(A).
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    \8\ See ``Pre-Completion Interval Training; F-1 Student Work 
Authorization,'' 57 FR 31954 (Jul. 20, 1992).
    \9\ See ``Extending Period of Optional Practical Training by 17 
Months for F-1 Nonimmigrant Students With STEM Degrees and Expanding 
Cap-Gap Relief for All F-1 Students With Pending H-1B Petitions,'' 
73 FR 18944 (Apr. 8, 2008).
    \10\ See ``Improving and Expanding Training Opportunities for F-
1 Nonimmigrant Students With STEM Degrees and Cap-Gap Relief for All 
Eligible F-1 Students,'' 81 FR 13040 (Mar. 11, 2016).
---------------------------------------------------------------------------

D. NPRM and Final Rules

    On October 23, 2023, DHS published an NPRM, ``Modernizing H-1B 
Requirements, Providing Flexibility in the F-1 Program, and Program 
Improvements Affecting Other Nonimmigrant Workers,'' 88 FR 72870. In 
the NPRM, DHS stated that it may publish one or more final rules to 
codify the proposed provisions after carefully considering public 
comments. On February 2, 2024, DHS published, ``Improving the H-1B 
Registration Selection Process and Program Integrity,'' which finalized 
provisions of the NPRM related to the H-1B registration process.\11\ 
Specifically, the final rule established a beneficiary centric 
selection process for H-1B registrations and new integrity measures, 
and provided start date flexibility for certain H-1B cap-subject 
petitions. That rule took effect on March 4, 2024, prior to the 
beginning of the registration period for the FY 2025 H-1B cap year. 
Through this subsequent rulemaking, DHS is finalizing many of the 
remaining provisions of the NPRM with the revisions described above and 
in the relevant sections below.
---------------------------------------------------------------------------

    \11\ See 89 FR 7456.
---------------------------------------------------------------------------

III. Response to Public Comments on the Proposed Rule

A. Summary of Public Comments on the Proposed Rule

    In response to the proposed rule, DHS received 1,315 comments 
during the 60-day public comment period. Of these, 510 comments were 
related to the H-1B registration process and were analyzed and 
addressed in the final rule published on February 2, 2024. There were 
970 comments related to the remaining provisions that DHS is finalizing 
through this rule. Some comments included a discussion of both the 
registration process and the provisions being finalized through this 
rulemaking. Of the 970 comments analyzed for this rule, 17 comments 
were duplicate submissions, 1 comment was not germane to the rule, and 
approximately 83 were letters submitted through mass mailing campaigns.
    Commenters included individuals (including U.S. workers), 
companies, law firms, a federation of labor organizations, professional 
organizations, advocacy groups, nonprofit organizations, 
representatives from Congress and local governments, universities, and 
trade and business associations. Many commenters expressed support for 
the rule or offered suggestions for improvement. Of the commenters 
opposed to the rule, many commenters expressed opposition to a part of 
or all of the proposed rule. Some just expressed general opposition to 
the rule without suggestions for improvement. For many of the public 
comments, DHS could not ascertain whether the commenter supported or 
opposed the proposed rule.
    DHS has reviewed and considered all of the public comments received 
in response to the proposed rule. In this final rule, DHS is responding 
to public

[[Page 103059]]

comments that are related to the provisions that DHS is finalizing 
through this final rule. DHS's responses are grouped by subject area, 
with a focus on the most common issues and suggestions raised by 
commenters.

B. DHS/USCIS Statutory and Legal Issues

    Comment: A law firm wrote that the proposed rule reflects USCIS' 
commitment to seek opportunities within the bounds of the law to 
maximize flexibility for employers and beneficiaries. A joint 
submission by a professional association and an advocacy group 
commended USCIS for seeking to modernize the H-1B program by creating 
``opportunities for innovation and expansion'' in alignment with the 
American Competitiveness and Workforce Improvement Act of 1998 (ACWIA) 
and the American Competitiveness in the Twenty-first Century Act of 
2000 (AC21). The commenters articulated the importance of these 
statutes and the congressional intent behind them as multiple countries 
(e.g., Canada, the United Kingdom (UK), Australia, and Germany) have 
implemented new immigration programs to attract high-skilled workers.
    Response: DHS agrees with these commenters that this rule will, 
among other things, provide benefits and flexibilities for petitioners 
and beneficiaries.
    Comment: Some commenters perceived certain aspects of the proposed 
rule to be unlawful or stated that the proposed provisions would 
undermine prevailing statutes or Executive orders (E.O.). For example, 
a professional association wrote that DHS's proposed revisions would 
``fundamentally alter immigration laws that exceed [its] authority.'' 
Specifically, the association said that the proposed revisions would 
``directly undermine INA sections 101(a)(15)(H) and 214(c)(1)(i) (sic) 
and 8 CFR 214.2(h)(4)(B) (sic) via changing the definition of who 
qualifies as an H-1B visa holder. . . .''
    A business association asserted that certain proposed provisions in 
the NPRM are unlawful as written, including the proposed specialty 
occupation definition, non-speculative employment requirement, third-
party placement provisions, site visit authorities, and USCIS' 
authority to review LCAs. The association further remarked that these 
provisions would hinder the objectives of E.O. 14410 to develop 
artificial intelligence (AI) capabilities in the United States. As 
such, the association urged DHS to issue supplemental notices to 
withdraw these provisions or propose substantial changes to address 
their legal deficiencies, providing the public with the opportunity to 
comment on the revisions to the proposed rule. A trade association 
wrote that the proposed changes to visa qualifications and review 
processes would undermine E.O. objectives to ``attract and retain 
talent in AI and other critical and emerging technologies in the United 
States economy'' by jeopardizing the ability of H-1B nonimmigrants to 
renew their visas.
    A trade association wrote that DHS has neglected the congressional 
purpose of the H-1B program and has exceeded its statutory authority. 
Citing various examples found in statute and case law related to split 
enforcement powers and agency jurisdiction, the association stated that 
DOL has a greater share of authority and enforcement powers in the H-1B 
program compared to DHS's statutory carve-out. For example, the 
commenter asserted that while Congress delegated to DOL the authority 
to set wages, conduct investigations and enforcement actions, and 
protect U.S. labor interests (e.g., through setting the prevailing wage 
and requiring the same conditions for H-1B workers and U.S. workers), 
DHS's authority, codified at 8 U.S.C. 1184(i), focuses on determining 
whether the petitioner seeks to employ a professional in a ``specialty 
occupation.'' The association concluded that the authority to regulate 
the area of employment and definition of employer belongs to DOL, not 
DHS, and suggested that DHS constrain its regulatory scheme to the 
areas intended by Congress, applying DOL's definitions of key terms 
associated with the H-1B program. A professional association generally 
encouraged DHS to improve the legal integrity of H-1B regulations and 
advance policy goals that align with congressional intent.
    Response: DHS disagrees with the commenters' assertions that the 
proposed changes that are being finalized in this rule are ultra vires. 
DHS will not issue a supplemental notice to withdraw the proposed 
changes, or propose substantial changes as commenters suggested. The 
changes being made by this final rule are within the broad authority 
delegated to DHS by statute. The changes enhance the integrity of the 
H-1B program and provide needed clarification to existing rules, 
policies, and practices so that petitioners have greater clarity, 
transparency, and predictability as to the requirements for the H-1B 
classification.
    DHS's authority to regulate in the H-1B context is not limited, as 
some commenters asserted, to INA section 214(i), 8 U.S.C. 1184(i). That 
section pertains solely to the definition of ``specialty occupation.'' 
Rather, as explained in the proposed rule and in this final rule, DHS's 
authority is also derived from various provisions in the INA and HSA, 
including, but not limited to: INA section 101(a)(15)(H)(i)(b), 8 
U.S.C. 1101(a)(15)(H)(i)(b); INA section 103(a), 8 U.S.C. 1103(a); INA 
section 214(a)(1), 8 U.S.C. 1184(a)(1); INA section 214(c), 8 U.S.C. 
1184(c); INA section 214(g), 8 U.S.C. 1184(g); INA section 235(d)(3), 8 
U.S.C. 1225(d)(3); INA section 287(b), 8 U.S.C. 1357(b); HSA section 
112, 6 U.S.C. 112; HSA section 402, 6 U.S.C. 202; and HSA section 
451(a)(3) and (b), 6 U.S.C. 271(a)(3) and (b). Collectively, these 
various provisions provide DHS with broad authority to promulgate 
regulations to administer and enforce the H-1B nonimmigrant 
classification.
    DHS disagrees with some commenters' assertions that the proposed 
changes to the definition of specialty occupation are ultra vires 
because the statute does not contain the term ``directly related.'' 
While commenters are correct that INA section 214(i), 8 U.S.C. 1184(i), 
does not use the term ``directly related,'' the statute does refer to 
application of a body of highly specialized knowledge and attainment of 
a bachelor's or higher degree in the specific specialty (or its 
equivalent) as a minimum for entry into the occupation. DHS interprets 
the ``specific specialty'' requirement in INA section 214(i)(1)(B), 8 
U.S.C. 1184(i)(1)(B), to relate back to the body of highly specialized 
knowledge requirement referenced in INA section 214(i)(1)(A), 8 U.S.C. 
1184(i)(1)(A), required by the specialty occupation in question. The 
``specific specialty'' requirement is only met if the degree in a 
specific specialty or specialties, or equivalent, provides a body of 
highly specialized knowledge directly related to the duties and 
responsibilities of the particular position as required by INA section 
214(i)(1)(A). Because an occupation may involve application of multiple 
bodies of highly specialized knowledge, ``specific specialty'' is not 
limited to one degree field, or its equivalent, but may include 
multiple degree fields, or equivalents, that provide the body of highly 
specialized knowledge to be applied when performing the occupation. The 
requirement that each degree field, or its equivalent, be directly 
related to the position is the best interpretation of the statutory 
text

[[Page 103060]]

and consistent with existing USCIS practice.\12\
---------------------------------------------------------------------------

    \12\ See, e.g., Madkudu Inc. v. USCIS, No. 5:20-cv-2653-SVK 
(N.D. Cal. Aug. 20, 2021) Settlement Agreement at 4 (``[I]f the 
record shows that the petitioner would consider someone as qualified 
for the position based on less than a bachelor's degree in a 
specialized field directly related to the position (e.g., an 
associate's degree, a bachelor's degree in a generalized field of 
study without a minor, major, concentration, or specialization in 
market research, marketing, or research methods . . ., or a 
bachelor's degree in a field of study unrelated to the position), 
then the position would not meet the statutory and regulatory 
definitions of specialty occupation at 8 U.S.C. 1184(i)(1) and 8 CFR 
214.2(h)(4)(ii).''), https://www.uscis.gov/sites/default/files/document/legal-docs/Madkudu-settlement-agreement.pdf (last visited 
Oct. 23, 2024).
---------------------------------------------------------------------------

    DHS disagrees with the assertion of some commenters that USCIS does 
not have authority to review the contents of an LCA. The authority 
provided to DOL under INA section 212(n), 8 U.S.C. 1182(n), does not 
deprive DHS of authority to administer and enforce the H-1B 
nonimmigrant classification. Congress provided DHS with broad authority 
to administer and enforce the H-1B nonimmigrant classification, in 
addition to the authority provided to DOL to administer and enforce 
requirements pertaining to LCAs. See ITServe Alliance, Inc. v. U.S. 
Dep't of Homeland Sec., 71 F.4th 1028, 1037 (D.C. Cir. 2023) (the 
authorities provided to DOL under 8 U.S.C. 1182(n) ``are not by their 
terms exclusive, so as to oust USCIS from its own authority over the H-
1B petition process. And the INA strongly suggests that the agencies' 
respective authorities are complementary rather than exclusive. . . 
.''). As the U.S. Court of Appeals for the D.C. Circuit explained, INA 
section 103(a)(1), 8 U.S.C. 1103(a)(1), independently provides DHS with 
authority to administer and enforce the INA, including a petitioning 
employer's compliance with the terms of an LCA. Id.
    Commenters' assertions that DHS does not have authority to regulate 
the area of employment and definition of employer are similarly 
misplaced. As explained in the preamble to the proposed rule and in 
this final rule, DHS's authority in the H-1B context is not solely 
derived from INA section 214(i), 8 U.S.C. 1184(i). That provision only 
addresses the definition of ``specialty occupation.'' But the broad 
authority delegated or otherwise provided to DHS, which includes the 
authority to regulate the area of employment and definition of employer 
for purposes of provisions enforced by DHS, is provided in various 
other provisions, including, but not limited to: INA section 103(a), 8 
U.S.C. 1103(a), which authorizes the Secretary to administer and 
enforce the immigration and nationality laws and establish such 
regulations as the Secretary deems necessary for carrying out such 
authority; INA section 214(a)(1), 8 U.S.C. 1184(a)(1), which authorizes 
the Secretary to prescribe, by regulation, the time and conditions of 
the admission of nonimmigrants; and INA section 214(c)(1), 8 U.S.C. 
1184(c)(1), which authorizes the Secretary to prescribe how an employer 
may petition for an H-1B worker and to prescribe the form and 
information required in an H-1B petition. Commenters' assertion that 
DHS does not have the authority to regulate who may qualify as an H-1B 
employer because INA section 214(i), 8 U.S.C. 1184(i), does not include 
the term ``employer,'' is contrary to the express reference to 
``employer'' in INA section 214(c)(1), 8 U.S.C. 1184(c)(1), and the 
authority delegated or otherwise provided to DHS therein.\13\
---------------------------------------------------------------------------

    \13\ Other H-1B related provisions in the statute also refer 
specifically to the petitioning employer, employment, or being 
employed as an H-1B worker. See, e.g., INA secs. 214(c)(9), (10), 
(12), and (g)(5) and (6); 8 U.S.C. 1184(c)(9), (10), (12), and 
(g)(5) and (6).
---------------------------------------------------------------------------

    DHS disagrees with commenters' assertion that it lacks authority to 
conduct on-site inspections through the USCIS Fraud Detection and 
National Security Directorate (FDNS). In 2004, USCIS established FDNS 
in response to a congressional recommendation to establish an 
organization ``responsible for developing, implementing, directing, and 
overseeing the joint USCIS-Immigration and Customs Enforcement (ICE) 
anti-fraud initiative and conducting law enforcement/background checks 
on every applicant, beneficiary, and petitioner prior to granting 
immigration benefits.'' \14\
---------------------------------------------------------------------------

    \14\ See Conference Report to accompany H.R. 4567 [Report 108-
774], ``Making Appropriations for the Department of Homeland 
Security for the Fiscal Year Ending September 30, 2005,'' p. 74 
(Oct. 9, 2004), https://www.gpo.gov/fdsys/pkg/CRPT-108hrpt774/pdf/CRPT-108hrpt774.pdf.
---------------------------------------------------------------------------

    The site visits and inspections conducted by FDNS are authorized 
through multiple legal authorities. Congress delegated to the Secretary 
of Homeland Security the authority to administer and enforce the 
immigration laws. INA sec. 103(a)(1), 8 U.S.C. 1103(a)(1). The 
Secretary may confer this authority to any Department of Homeland 
Security (DHS) employee, including USCIS employees, to the extent 
permitted by law. INA sec. 103(a)(4), 8 U.S.C. 1103(a)(4); HSA sec. 
102(b)(1), 6 U.S.C. 112(b)(1); 8 CFR 2.1.\15\ Moreover, under 6 U.S.C. 
112(a)(3), all functions of officers, employees, and organizational 
units of [DHS] are vested in the Secretary. The Secretary of Homeland 
Security delegated to USCIS the authority to administer the immigration 
laws, including the authority to investigate civil and criminal 
violations involving applications or determinations for benefits.\16\ 
Following the dissolution of the INS and the creation of DHS on March 
1, 2003, authority to ``administer the immigration laws'' was delegated 
to USCIS.\17\
---------------------------------------------------------------------------

    \15\ Pursuant to 8 CFR 2.1, all authorities and functions of the 
Department of Homeland Security to administer and enforce the 
immigration laws are vested in the Secretary of Homeland Security. 
The Secretary of Homeland Security may, in the Secretary's 
discretion, delegate any such authority or function to any official, 
officer, or employee of the Department of Homeland Security, 
including delegation through successive redelegation, or to any 
employee of the United States to the extent authorized by law. Also, 
because INA sec. 103(a)(4) refers to ``Service'', i.e. Legacy INS, 
see also 8 CFR 1.2 which defines Service as ``U.S. Citizenship and 
Immigration Services, U.S. Customs and Border Protection, and/or 
U.S. Immigration and Customs Enforcement, as appropriate in the 
context in which the term appears.''
    \16\ Delegation to the Bureau of Citizenship and Immigration 
Services, Department of Homeland Security Delegation Number 0150.1, 
Issue Date: 06/05/2003. The Bureau of Citizenship and Immigration 
Services was the initial name for USCIS following the dissolution of 
the Immigration and Naturalization Service.
    \17\ See Delegation 0150.1(II)(H) (June 5, 2003).
---------------------------------------------------------------------------

    USCIS was delegated the ``authority to investigate alleged civil 
and criminal violations of the immigration laws, including, but not 
limited, to alleged fraud with respect to applications or 
determinations within the USCIS, and make recommendations for 
prosecutions, or other appropriate action when deemed advisable.'' \18\ 
USCIS also has the ``authority to interrogate aliens and issue 
subpoenas, administer oaths, take and consider evidence, and 
fingerprint and photograph aliens under sections 287(a), (b), and (f) 
of the INA, 8 U.S.C. 1357 and under 235(d) of the INA, 8 U.S.C. 
1225(d).'' \19\
---------------------------------------------------------------------------

    \18\ See Delegation 0150.1(II)(I) (June 5, 2003).
    \19\ See Delegation 0150.1(II)(S) (June 5, 2003).
---------------------------------------------------------------------------

    USCIS and ICE were granted concurrent authority to investigate 
immigration benefit fraud.\20\ Through

[[Page 103061]]

written agreement, ICE agreed to take the lead on criminal and other 
enforcement investigations and USCIS agreed to focus on detecting and 
combating fraud associated with adjudicating applications and 
petitions.\21\ The Homeland Security Act of 2002, Public Law 107-296, 
116 Stat. 2135, granted the Secretary of Homeland Security the 
authority to administer and enforce provisions of the INA, as amended, 
INA sec. 101, 8 U.S.C. 1101 et seq. The Secretary, in Homeland Security 
Delegation No. 0150.1, delegated certain authorities to USCIS. FDNS's 
activities fall squarely within this delegation.
---------------------------------------------------------------------------

    \20\ In section (II)(I) of DHS Delegation Number 0150.1, 
Delegation to the Bureau of Citizenship and Immigration Services, 
and in section 2(I) of DHS Delegation Number 7030.2, Delegation of 
Authority to the Assistant Secretary for the Bureau of Immigration 
and Customs Enforcement, USCIS and ICE received concurrent authority 
to investigate fraud involving immigration benefits available under 
the INA. In their respective delegations, USCIS and ICE were further 
directed by the Secretary of Homeland Security to coordinate the 
concurrent responsibilities provided under these Delegations. A 
memorandum of agreement was undertaken to advance the coordination 
between USCIS and ICE, as authorized by these Delegations. The 
Secretary of Homeland Security has properly delegated authority to 
immigration officers, including immigration officers who work for 
FDNS.
    \21\ Memorandum of Agreement between USCIS and ICE on the 
Investigation of Immigration Benefit Fraud, September 25, 2008; see 
also Memorandum of Agreement between USCIS and ICE Regarding the 
Referral of Immigration Benefit Fraud and Public Safety Cases (Dec. 
15, 2020).
---------------------------------------------------------------------------

    Further, regulations support the FDNS activities that are described 
in this rule. For example, 8 CFR 1.2, defines ``immigration officer'' 
to include a broad range of DHS employees including immigration agents, 
immigration inspectors, immigration officers, immigration services 
officers, investigators, and investigative assistants. As duly 
appointed immigration officers, FDNS immigration officers may question 
noncitizens based on the authority delegated to them by the Secretary 
of Homeland Security. Furthermore, INA sec. 287(a)(1), 8 U.S.C. 
1357(a)(1), provides any officer or employee of the Service with the 
authority (pursuant to DHS regulations) to, without warrant, 
``interrogate any alien or person believed to be an alien as to his 
right to be or remain in the United States.'' See also 8 CFR 287.5. The 
regulation at 8 CFR 287.8(b) specifically sets out standards for 
interrogation and detention not amounting to arrest, wherein 
immigration officers can question an individual so long as they do not 
restrain the freedom of the individual. Further, the Board of 
Immigration Appeals has recognized that the reports produced by FDNS 
based on site visits and field investigations are ``especially 
important pieces of evidence.'' \22\ These investigations and resulting 
reports help ensure that adjudicative decisions are made with 
confidence by providing information that would otherwise be unavailable 
to USCIS.
---------------------------------------------------------------------------

    \22\ Matter of P. Singh, 27 I&N Dec. 598, 609 (BIA 2019) 
(``Detailed reports from on-site visits and field investigations are 
especially important pieces of evidence that may reveal the presence 
of fraud.'').
---------------------------------------------------------------------------

    Lastly, DHS disagrees that this final rule is inconsistent with the 
Executive Order on Artificial Intelligence.\23\ That Executive order, 
among other things, directed DHS to ``continue its rulemaking process 
to modernize the H-1B program and enhance its integrity and usage, 
including by experts in AI and other critical and emerging 
technologies. . . .'' DHS satisfied this part of the Executive order 
through its continued work to complete and publish this final rule. As 
explained throughout this preamble, this final rule, along with the 
final rule published on February 2, 2024,\24\ modernizes the H-1B 
program and enhances its integrity and use by, among other things, 
providing greater clarity, transparency, and predictability regarding 
eligibility for the H-1B classification. As explained further below, 
DHS disagrees that requiring a direct relationship between the required 
degree field(s), or their equivalents, and the duties of the position 
is inconsistent with E.O. 14110 or creates additional hurdles for 
foreign nationals seeking to work in AI or other science, technology, 
engineering, and math (STEM) fields. As stated previously, DHS is 
codifying and clarifying long-standing USCIS practice to provide 
greater clarity and predictability for employers and foreign nationals, 
including those seeking to work in AI or other STEM fields.
---------------------------------------------------------------------------

    \23\ E.O. 14110, ``Executive Order on Safe, Secure, and 
Trustworthy Development and Use of Artificial Intelligence.''
    \24\ ``Improving the H-1B Registration Selection Process and 
Program Integrity'', 89 FR 7456 (Feb. 2, 2024).
---------------------------------------------------------------------------

C. General Comments

1. General Support for the Rule
    Comment: Several individual commenters expressed support for the 
proposed rule without rationale, with some expressing ``strong'' 
support. A couple of individual commenters thanked USCIS for 
modernizing the H-1B program. An individual commenter wrote that, 
``this is life changing,'' and another commenter wrote that, ``this is 
a great and substantial improvement.'' Another commenter applauded 
various specific measures of the rule, including those pertaining to 
deference, evidence of job offers, oversight, and streamlining the H-1B 
process.
    Response: DHS agrees that the provisions in this rule will 
modernize and improve the H-1B program.
    Comment: Several commenters expressed general support for the 
proposed rule because of positive impacts on program operability, 
oversight, integrity, and government efficiency. Many commenters 
expressed support for the proposed rule, reasoning that it would foster 
fairness in the H-1B program, reduce abuse and promote program 
integrity, and create a more efficient system. A few commenters 
expressed support for the proposed rule, reasoning it would improve 
program efficiency and reduce administrative burdens, and could result 
in smoother, more streamlined procedures that are easier to follow. A 
commenter wrote that the proposed rule is a ``significant step towards 
creating a more inclusive and efficient immigration system.''
    Response: DHS agrees with these commenters that the provisions in 
this rule will have positive impacts on program operability and 
integrity. Many of the provisions being finalized through this rule are 
intended to promote program integrity and create a more efficient 
system.
    Comment: Several commenters, including a joint submission, 
expressed support for the proposed rule on the basis that it would have 
positive impacts on prospective beneficiaries. A commenter wrote that 
the proposed rule has the potential to provide highly skilled 
professionals with the chance to secure employment in and make 
meaningful contributions to the United States. A commenter said that it 
is crucial to protect nonimmigrant workers' rights and ensure that they 
are treated fairly, and that this proposed rule is a ``significant step 
in the right direction.'' The commenter urged USCIS to fully implement 
the proposed rule. Another commenter expressed their agreement with the 
proposed changes, having seen their colleagues leave the United States 
every year due to losing their valid visa status. A commenter expressed 
support for the proposed rule, writing that providing greater 
flexibility for beneficiaries is a ``much-needed change.'' The 
commenter added making the visa renewal process easier could 
significantly reduce hurdles and uncertainties that foreign workers 
face.
    Response: DHS agrees with these commenters that the provisions in 
this rule will have positive impacts on prospective beneficiaries and 
provide beneficiaries with greater flexibility. DHS's intent is to make 
the H-1B process more efficient and fairer by reducing administrative 
hurdles and uncertainties through this rulemaking, such as codifying 
USCIS' deference policy to make it clear that, if there has been no 
material change in the underlying facts, adjudicators generally should 
defer to a prior determination involving the same parties and 
underlying facts, and giving USCIS officers the discretion to issue 
RFEs to allow petitioners to request amended validity periods where the 
initial

[[Page 103062]]

requested validity period expires before adjudication.
    Comment: Many commenters, including a trade association, a company, 
and a joint submission, expressed support for the proposed rule, 
reasoning that it would strengthen the U.S. job market and economy. A 
trade association commented that streamlining the H-1B program 
requirements and improving program integrity would enable the United 
States to retain valuable international talent. A company said that 
they appreciate DHS's effort to improve the H-1B system, adding that a 
modern H-1B program that reflects today's economy would keep the United 
States attractive to global talent and ensure that U.S. employers can, 
``maintain a comprehensive workforce.'' An advocacy group wrote that 
the proposed provisions aimed at modernizing and streamlining the H-1B 
program would ``strengthen the nation's capacity to attract and retain 
essential global talent'' in artificial intelligence and other fields 
in emerging technology.
    A commenter expressed strong support for the proposed rule, writing 
that it would ``bolster the nation's competitive edge'' and promote 
economic growth. A couple of other commenters similarly wrote that the 
proposed changes to the H-1B program would give the United States a 
global competitive advantage and attract the brightest minds from 
around the world. One of these commenters added that streamlining the 
visa process could benefit the U.S. economy and encourage innovation. 
Another commenter also expressed their support for the proposed rule 
for similar reasons, writing that the proposed changes to improve the 
H-1B program would create jobs and benefit not only U.S. employers but 
also professionals who want to contribute to the United States' 
success. A few commenters expressed support for the proposed rule on 
the basis that, under the current H-1B policies, many talented 
individuals are leaving the United States, and the proposed rule would 
prevent this from continuing. One of these commenters wrote that 
modernizing the H-1B program is essential for retaining top talent and 
allowing the United States to become ``competitive once again on the 
global stage.''
    Response: DHS agrees with these commenters that clarifying the H-1B 
program requirements and improving program integrity will help enable 
the United States retain valuable international talent. Through the 
provisions in this rulemaking, DHS's goal is to keep the United States 
attractive to global talent, benefit the U.S. economy, and encourage 
innovation.
2. General Opposition to the Rule
    Comment: Several commenters, including an advocacy group, expressed 
opposition to the proposed rule on the basis that it would undermine 
the program's integrity and increase fraud. An individual commenter 
stated that the regulations do not satisfactorily address their 
perceived problems of the H-1B program.
    Response: DHS disagrees with these commenters that the provisions 
in this rulemaking will undermine the H-1B program or increase fraud. 
DHS is finalizing several provisions that aim to increase program 
integrity, such as codifying its authority to request contracts, 
requiring that the petitioner establish it has an actual, bona fide 
position in a specialty occupation available for the beneficiary as of 
the requested start date, and codifying USCIS' authority to conduct 
site visits, to name a few.
    Comment: Numerous commenters said the rule would negatively impact 
U.S. citizen workers by incentivizing the hiring of H-1B workers. In 
particular, commenters stated that the proposed rule would harm and 
undermine American workers, particularly those in the technology 
industry; does not adequately safeguard American workers and makes it 
easier for American companies to obtain foreign labor; would benefit 
large employers, while putting American job seekers at a disadvantage; 
and would incentivize employers to hire ``cheaper foreign labor'' and 
avoid taxes at the expense of U.S. citizens.
    A commenter urged USCIS to make the H-1B program stricter, stating 
that the Federal Government should work towards improvements for U.S. 
citizens, rather than immigrant labor. A couple of commenters, 
including a professional association, wrote that American students that 
have graduated with specialty degrees are unable to gain employment.
    Response: DHS disagrees that this rulemaking would undermine 
American workers or put American job seekers at a disadvantage. The 
existing H-1B statutory and regulatory requirements include protections 
for U.S. workers and this rulemaking does not remove or diminish any 
protections or place U.S. workers at a disadvantage in the job market. 
The goal of this rulemaking is to modernize and improve the integrity 
of the H-1B program. In fact, this final rule will improve H-1B 
integrity and build upon the existing protections for U.S. workers by 
clarifying that the LCA must properly correspond to the H-1B petition, 
and codifying the authority of USCIS to conduct site visits and take 
adverse action against employers who are not complying with the terms 
of the H-1B petition approval or who refuse to comply with a site 
visit.
    Comment: A few commenters noted that the proposed rule could make 
it more difficult for small and medium-sized consulting companies to 
navigate the H-1B process. More specifically, a few commenters, 
including a couple of trade associations and a law firm, stated that 
the U.S. information technology (IT) industry's ability to hire 
reliable foreign talent would be negatively affected, which would harm 
the competitiveness of American businesses, research facilities, 
medical institutions, and other important economic drivers. A few 
commenters, including a company, remarked that the proposed rule would 
make it difficult for IT consulting companies to utilize the H-1B visa, 
which would cause the economy to suffer. A business association 
articulated concerns among its members that various proposals would 
cause significant disruptions to their operations across industries. In 
addition, a commenter stated that the proposed rule would hamper 
companies' ability to serve their customers given labor shortages, 
inflation, and budgetary constraints.
    Response: DHS disagrees with these commenters that the provisions 
in this rulemaking will make it more difficult for certain companies to 
navigate the H-1B process or cause disruptions for certain industries. 
Through this rulemaking, DHS is codifying many policies and practices 
that are already in place, such as requiring that the LCA properly 
correspond to the petition and when to file an amended petition. 
Through this rulemaking, DHS's intent is to clarify current policy and 
add transparency and greater predictability to the adjudication 
process.
3. Other General Comments on the Rule
    Comment: An individual commenter, while expressing support for 
``the broad goal of modernization and program improvements,'' noted the 
importance of measures to prevent the exploitation of foreign workers 
and to ensure that they are provided fair wages and working conditions; 
prioritizing streamlining and efficiency in program administration, 
measures to protect and support international students, and data 
collection and analysis; and that DHS should actively engage with 
stakeholders to solicit input and feedback during the rulemaking 
process.

[[Page 103063]]

    Response: While the commenter did not provide any specific feedback 
related to the provisions in the NPRM, DHS generally agrees with the 
considerations noted by the commenter. As stated previously, the 
purpose of this rulemaking is to modernize and improve the efficiency 
of the H-1B program, add benefits and flexibilities, and strengthen 
integrity measures. The modernization provisions will enhance 
efficiencies, and the integrity measures are intended to prevent 
exploitation of foreign workers and protect the interests of U.S. 
workers. Further, by finalizing the provision to expand cap-gap 
protection, this rule supports international students. DHS has also 
engaged in extensive data collection and analysis in this rulemaking, 
as detailed in the NPRM, the previously published final rule 
``Improving the H-1B Registration Selection Process and Program 
Integrity,'' and this final rule. In addition, DHS has engaged with 
stakeholders by requesting public comments in response to the NPRM.

D. Modernization and Efficiencies

1. General Comments on the Proposed Modernization and Efficiencies 
Provisions
    Comment: Many commenters supported the proposed modernization 
provisions, including a joint submission by commenters who stated 
general support for DHS's initiative to modernize the H-1B program. A 
couple of commenters regarded the modernization efforts as 
``commendable,'' while another commenter said the modernization 
measures were ``long overdue.'' This commenter and another commenter 
reasoned that the modernization provisions would streamline 
administrative tasks and remove disruptions in the program. A commenter 
expressed support for the modernization provisions, stating that they 
would help prevent artificial manipulation of the job market.
    Echoing support for the NPRM's modernization efforts, a company 
noted that the United States' outdated immigration laws must be updated 
to meet the needs of the economy. A different commenter applauded the 
modernization effort and urged its implementation in order to benefit 
U.S. economic competitiveness. A trade association similarly endorsed 
the H-1B modernization provisions as advancing the United States' 
global leadership in specialized fields, such as STEM. Specifically, 
the association reasoned that the sustainability of U.S. leadership 
depends on semiconductor companies having access to top domestic and 
global talent.
    Some commenters offered mixed remarks on the modernization 
provisions. For example, a commenter urged policymakers to take 
immediate action to implement the modernization provisions while 
highlighting the importance of balancing between welcoming global 
talent and safeguarding the interests of U.S. citizen workers. Another 
commenter offered conditional support for the modernization provisions 
as long as there is no disruption to existing H-1B visa holders.
    A few commenters expressed support for efficiency measures as part 
of the proposed rule. For example, a commenter expressed general 
approval of DHS's plans to improve clarity and efficiency. Another 
commenter said that streamlining the eligibility requirements, 
improving program efficiency, and providing greater benefits and 
flexibilities for both employers and workers are crucial steps toward 
creating a more efficient and responsive immigration system. Another 
commenter described the importance of the H-1B visa program to the U.S. 
economy and of increased program efficiency, and noted technology, 
medicine, and research as particular industries that could benefit from 
the modernization provisions.
    Response: DHS agrees that modernizing the H-1B program and 
increasing program efficiency are important and may help to streamline 
administrative tasks. As explained in the NPRM, the purpose of this 
rulemaking is to modernize and improve the H-1B regulations by: (1) 
clarifying the requirements of the H-1B program and improving program 
efficiency; (2) providing greater benefits and flexibilities for 
petitioners and beneficiaries; and (3) strengthening H-1B integrity 
measures.
2. Specialty Occupation Definition and Criteria
i. General Comments on the Proposed Changes to ``Specialty Occupation''
    Comment: Several commenters expressed support for the proposed 
changes to the specialty occupation requirements and standards. For 
example, a commenter said that the specialty occupation revisions are a 
``good step'' for H-1B program modernization. Other commenters 
expressed general support for the specialty occupation requirements or 
specialized degree requirements for specialized work. Several 
commenters generally supported the proposed specialty occupation 
requirements noting that they would help curb fraud and abuse by 
certain types of companies. A university stated it was hopeful that the 
proposed modifications to the specialty occupation requirements would 
reduce the number of Requests for Evidence (RFE) that it receives when 
filing H-1B petitions for faculty and staff. In addition, a 
professional association expressed support for DHS's proposed changes 
to clarify the ``special occupation'' standard, codify existing 
practice, and align the regulations with the authorizing statute. The 
association said that the changes would avoid misapplication of the 
regulations in petitions involving new employment.
    Response: DHS agrees that the specialty occupation revisions, as 
slightly modified from the NPRM to better reflect current practice, 
will be beneficial for H-1B program modernization and integrity. DHS 
also agrees that clarifying the specialty occupation standard and 
codifying existing practice may help reduce unnecessary RFEs, avoid 
misapplication of the regulations, better align the regulations with 
the authorizing statute, and provide H-1B petitioners with more 
certainty as to the applicable adjudication standards.
    Comment: Several commenters expressed general opposition to the 
proposed specialty occupation changes. For example, a form letter 
campaign and another commenter generally stated that they did not 
support the proposed specialty occupation provisions, and other 
commenters suggested that DHS reconsider the specialty occupation 
requirements without providing further rationale. A few commenters 
requested that USCIS remove the definition of ``specialty occupation'' 
from the rule, reconsider its implementation, or modify the definition. 
A few other commenters stated that the ``specialty occupation'' 
definition should be broadened so that individuals are not limited to 
positions just within their field of study or degree.
    Response: DHS declines to remove the definition of specialty 
occupation from the rule but is modifying the definition in response to 
comments received. These modifications include removing the references 
to general degree titles and defining the term ``directly related.'' 
DHS declines to broaden the definition of specialty occupation to 
specifically state that individuals are not limited to positions within 
their field of study, as such language conflates the issue of whether a 
position qualifies as a specialty occupation with the issue of whether 
the beneficiary is qualified to

[[Page 103064]]

perform the specialty occupation. Further, the proposed definition 
already states that a position may allow for a range of qualifying 
degree fields, provided that each of those fields is directly related 
to the duties of the position.
    Comment: Several commenters questioned whether the changes to the 
specialty occupation definition and criteria are consistent with DHS's 
stated intent to codify existing practices. For instance, an advocacy 
group expressed concern that, while the Department views the updated 
regulations as a codification of existing practices, the new definition 
and criteria could, in practice, change the way petitions are 
adjudicated. The group said that the strict application of the 
regulatory text, which in its view does not reflect the broader 
analysis described in the preamble, could result in an overly narrow 
application of the provisions. The group proposed that the Department 
either abandon the proposed changes or amend the regulatory text to 
reflect the analysis described in the preamble by stating explicitly 
that USCIS will conduct fair evaluations of specialized coursework and 
training.
    Numerous other commenters also expressed concerns with respect to 
how USCIS will consider work experience, skills, and demonstrated 
competencies to fulfill the specialty occupation degree requirements. 
These commenters indicated that the consideration of work experience 
and skills would better ensure that USCIS determinations reflect 
evolving workforce realities of employer demands for individuals to 
fill specialized roles which require professionals to adapt and develop 
new skills. Commenters also said that consideration of experience and 
skills would accommodate new and emerging technologies and be 
consistent with the dynamic nature of industries. The commenters said 
that experience should be a factor in determining specialty 
occupations, as experience equips individuals with hands-on skills, 
industry insights, and problem-solving abilities that are often not 
fully captured by academic qualifications alone. A couple of the 
commenters added that experience frequently links theoretical and 
practical competence, serving as a trustworthy gauge of a candidate's 
ability to meet the demands of their line of work. Likewise, a company 
expressed support for the updates and simplification of the specialty 
occupation definition, but also expressed concern that the proposed 
changes would lead to a perfunctory assessment of the relatedness of a 
beneficiary's specialty to the position while neglecting the nuances of 
the educational backgrounds required for innovation in the technology 
sector. The company urged DHS to protect the individualized framework 
and improve it by enhancing clarity and preserving flexibility in the 
H-1B program, allowing for continual modernization in line with 
emerging technological developments.
    Several commenters recommended DHS revise the regulatory text to 
clarify that USCIS will consider relevant coursework or courses of 
study alongside the degree field in its decision-making, consistent 
with established preexisting agency practices. A trade association 
recommended that DHS rescind the proposed changes or amend the 
regulatory text to better codify existing agency practices, for 
example, by expressly requiring adjudicators to consider the coursework 
underlying a particular degree as well as the petitioner's explanation 
as to why the degree is directly related to the relevant occupation. A 
company similarly encouraged DHS to revise its definition and criteria 
to focus on the courses completed in a degree program, and provided 
revised regulatory text to reflect this change.
    Several commenters expressed general concern with the use of the 
terms ``degrees'' and ``positions'' in the specialty occupation 
definition and criteria, reasoning that the proposed language is 
misaligned with longstanding agency practices. For example, a Federal 
elected official, associations, and a joint submission, suggested 
alternative regulatory language, proposing that DHS use the term 
``course of study'' instead of ``degree'' in the definition of 
``specialty occupation'' at proposed 8 CFR 214.2(h)(4)(ii) and position 
criteria requirements at 8 CFR 214.2(h)(4)(iii)(1) through (4). These 
commenters also proposed that DHS substitute ``job duties of the 
position'' or ``job duties'' for references to ``the position'' in the 
specialty occupation definition at 8 CFR 214.2(h)(4)(ii) and position 
criteria requirements at 8 CFR 214.2(h)(4)(iii)(A)(1) through (4). 
Additionally, commenters claimed that DHS should use the terms 
``degrees'' or ``positions'' in reference to the statutory standard, 
but the modernized regulations should reflect longstanding agency 
practices by omitting degree references (e.g., business administration) 
and incorporating references to courses of study and job duties. A 
Federal elected official wrote that while the proposed rule seeks to 
clarify existing agency practices for specialty occupation 
adjudications, the use of the terms ``degrees'' and ``positions'' 
instead of ``courses studied'' and ``duties of the position'' fails to 
capture longstanding agency policy, creating unreasonable requirements 
for employers and professionals. The official warned that focusing on 
degree titles and positions would deviate from existing policy and 
preclude those who would otherwise qualify for H-1B classification. 
Another commenter expressed particular concern with the proposed rule's 
use of terms like ``degrees'' and ``positions'' and their view that the 
rule is misaligned with longstanding agency practices.
    Additionally, commenters urged DHS to finalize the rule to better 
reflect longstanding agency practices by omitting references to 
particular types of degrees (e.g., business administration) and 
incorporating references to courses of study and job duties within the 
specialty occupation definition and criteria. A few commenters wrote 
that, although DHS explains that referring to the degree title was for 
``expediency'' and the agency separately evaluates the beneficiary's 
actual course of study, the ``binding'' regulatory language fails to 
capture the realities of preexisting agency practices. A trade 
association expressed concern that the proposed regulations, as 
written, could significantly narrow the types of degrees that USCIS 
would accept for a given occupation, and that the rule fails to codify 
existing practices that manufacturers use to demonstrate compliance.
    Response: DHS agrees that it is important to improve the H-1B 
program by enhancing clarity and preserving flexibility to align with 
emerging technological developments and industry requirements. With 
this rulemaking, DHS seeks to create a more flexible definition of 
specialty occupation that can be adapted to occupations in new and 
emerging fields, such as STEM and AI, by clarifying that a position may 
allow for a range of qualifying degree fields. DHS also agrees that it 
is important to acknowledge the realities of the workforce and the 
evolving demands of specialized roles, accommodate new and emerging 
technologies, and be consistent with the dynamic nature of industries. 
As proposed and finalized, the definition of specialty occupation will 
make it clear that DHS will consider a range of qualifying degree 
fields and multiple bodies of highly specialized knowledge when 
assessing whether a position is a specialty occupation, and that 
`normally'' does not mean ``always'' within the context of the 
specialty

[[Page 103065]]

occupation criteria. 88 FR 72870, 72871 (Oct. 23, 2023); new 8 CFR 
214.2(h)(4)(ii). The changes made to the definition of specialty 
occupation and its criteria are intended to codify existing practices 
and, as such, are not expected to create new restrictions on 
eligibility or lead to significant changes in adjudications.
    In response to stakeholder feedback, DHS is making some revisions 
to this final rule compared to the NPRM to better reflect DHS's 
original intent when proposing the specialty occupation changes. For 
example, DHS is not finalizing the sentence, ``The required specialized 
studies must be directly related to the position,'' as this sentence 
may have erroneously suggested that DHS would not look beyond the 
specialized studies or degree when assessing H-1B eligibility.\25\ To 
address commenters' concerns about over-reliance on degree titles, DHS 
is removing the references to ``business administration'' and ``liberal 
arts'' in the final rule. DHS is also clarifying the level of 
connection needed to meet the ``directly related'' requirement by 
specifying in the final regulatory text that ``directly related'' means 
that there is a logical connection between the required degree, or its 
equivalent, and the duties of the position. Further, DHS is adding a 
reference to the ``duties of the position'' in the specialty occupation 
definition and ``job duties'' in the specialty occupation criteria in 
response to comments and to assure stakeholders that this practice has 
not changed.
---------------------------------------------------------------------------

    \25\ While DHS is not finalizing this particular sentence, this 
does not indicate an intent to change current practice with respect 
to the ``directly related'' requirement. The ``directly related'' 
requirement will be finalized elsewhere in the specialty occupation 
definition and criteria, consistent with current practice and case 
law. See, e.g., Caremax Inc v. Holder, 40 F. Supp. 3d 1182, 1187-88 
(N.D. Cal. 2014) (holding that 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).
---------------------------------------------------------------------------

    DHS disagrees with comments claiming that the changes to the 
specialty occupation provisions are contrary to USCIS's stated 
commitment to utilize an individualized framework and allow 
adjudicators to discount a beneficiary's coursework, work experience, 
and specialized skills. DHS believes that these commenters have 
conflated the issue of whether a position qualifies as a specialty 
occupation with the issue of whether a beneficiary is qualified to 
perform the specialty occupation. The changes to the specialty 
occupation provisions do not impact how USCIS evaluates and will 
continue to evaluate a beneficiary's qualifications. See 8 CFR 
214.2(h)(4)(iii)(C) and (D). DHS confirms that USCIS will continue to 
consider work experience, skills, and courses of study in determining 
whether a beneficiary meets the qualifications for a specialty 
occupation position. As stated in the NPRM, USCIS will continue to 
separately evaluate whether a beneficiary's actual course of study is 
directly related to the duties of the position, rather than merely 
looking at the title of the degree. USCIS will continue to make 
individualized determinations in each case, and will consider whether 
the beneficiary has the 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. 
See 8 CFR 214.2(h)(4)(iii)(C)(4), (h)(4)(iii)(D). As such, DHS will not 
adopt the suggestions to abandon or further amend the regulatory 
definition of specialty occupation to specify that ``specialized 
coursework and training will be fairly evaluated.'' Such amendments are 
unnecessary because of existing regulatory text pertaining to the 
beneficiary's qualifications and the other changes finalized in this 
rule.
    Comment: Multiple commenters specifically discussed alternative 
training and certification programs as relevant to ``specialty 
occupation'' determinations. For example, a professional association 
recommended including alternative training programs, such as 
apprenticeships, in the specialty occupation determination, noting that 
this approach would better align H-1B rules with the growing importance 
of skills-based hiring. Citing a report, the professional association 
noted a trend towards ``holistic, well-rounded'' hiring practices 
beyond degree attainment. The association concluded that under a 
modernized U.S. immigration system, U.S. employers must be able to 
assess talent in ways that meet their needs, including by allowing them 
to employ nontraditional tactics, such as skills-based hiring and 
apprenticeship programs.
    Several commenters, including an apprenticeship intermediary 
company, trade associations, a large company, and an advocacy group, 
expressed a common concern that a company's practice of hiring 
registered apprentices for entry-level positions could jeopardize its 
ability to obtain H-1B visas for related positions. The commenters 
wrote that ambiguity around current H-1B program requirements has 
deterred companies from participating in or initiating apprenticeship 
programs. The commenters acknowledged the NPRM's efforts to address 
this concern, including by clarifying the meaning of ``normally,'' but 
urged DHS to consider additional ways to support employers' efforts to 
explore apprenticeship programs. Some of the commenters asked DHS to 
clarify in the rule that the presence of an apprenticeship program in 
an occupation or the employment practices of a petitioner should not be 
taken as evidence that an occupation or employer does not normally 
require a degree in a specific specialty, or to establish explicit 
protections for companies that have engaged Registered Apprenticeship 
programs while also petitioning for H-1B beneficiaries.
    Similarly, a few trade associations commended DHS for acknowledging 
the flexibility needed in making specialty occupation determinations, 
but added that DHS should do more to support skills-based hiring 
initiatives. The commenters asked that DHS recognize that an employer 
can implement a skills-based hiring program without undermining its 
ability to sponsor H-1B beneficiaries for the same or similar roles and 
encouraged DHS to consider ways to help employers distinguish skills-
based hiring roles from degreed roles at all points in the employment 
ecosystem--from recruitment, onboarding, progression in career, and at 
the engagement level, stating that additional clarification will enable 
employers to broaden skills-based hiring initiatives while balancing 
the H-1B standards. One commenter also encouraged DHS to examine degree 
equivalency standards and consider new ways employees obtain needed 
skills outside the traditional 4-year degree paradigm, including 
employer certificate programs, apprenticeship programs, and college-
level courses. A trade association suggested factoring in other ways 
that employers can upskill their workforces, such as certificate 
programs, reasoning that in not considering these factors, USCIS 
creates obstacles for employers who might otherwise expand skills-based 
employment practices.
    Response: The revisions to the specialty occupation provisions are 
not intended to negatively impact skills-based hiring practices and 
alternative training programs. Conversely, several provisions, such as 
the new definition of ``normally,'' which clarifies that ``normally'' 
does not mean ``always,'' are intended to help support these programs 
and initiatives. As stated in the NPRM, DHS recognizes that as 21st

[[Page 103066]]

century employers strive to generate better hiring outcomes, improving 
the match between required skills and job duties, employers have 
increasingly become more aware of a skills-first culture, led by the 
Federal Government's commitment to attract and hire individuals well-
suited to available jobs. 88 FR 72870, 72871 (Oct. 23, 2023). There is 
already flexibility inherent in H-1B adjudications that allows 
employers to explore where skills-based hiring is sensible. By 
definition, a specialty occupation is one which requires attainment of 
a bachelor's or higher degree ``or its equivalent.'' The allowance for 
the ``equivalent'' of a degree in a specific specialty recognizes that 
the requisite level of knowledge for a particular beneficiary may be 
gained through, among other things, additional coursework or training 
as suggested by the commenter. Further, the existing regulations at 8 
CFR 214.2(h)(4)(iii)(C)(4), (h)(4)(iii)(D)--which are not being changed 
in this final rule--already allow USCIS to examine degree equivalency 
standards and consider a worker's training, experience, and skills 
outside of the traditional 4-year degree paradigm. DHS believes the 
finalized regulatory text is sufficiently flexible to allow employers 
to explore where skills-based hiring, apprenticeships, and alternative 
training programs are sensible, and declines to make the suggested 
regulatory text changes to specifically reference apprenticeships and 
training programs.
    Comment: A few commenters voiced concern that the proposed 
specialty occupation provisions conflict with the INA. A form letter 
campaign said that DHS should not adopt the proposed revisions to the 
definition and criteria for ``specialty occupation,'' arguing that they 
conflict with the plain language of the statute and are based on a 
rescinded Executive order from the prior administration. A professional 
association and an individual commenter said they were disappointed to 
see DHS ``recycle'' the same language from the 2020 interim final rule 
(IFR) ``Strengthening the H-1B Nonimmigrant Visa Classification 
Program,'' 85 FR 63918 (Oct. 8. 2020). Some commenters, including an 
advocacy group, said that these changes attempt to ``revive'' or 
``resurrect'' invalidated guidance and rules from a prior 
administration. The advocacy group referenced an attorney's argument 
from a lawsuit against the 2020 IFR, which was later blocked by courts, 
and claimed that the NPRM copied the prior rule's restrictive language 
which is inconsistent with the INA and current USCIS practice.
    Response: DHS does not agree that the revisions to the definition 
and criteria for specialty occupation conflict with the plain language 
of the statute. As explained in the NPRM, the revised regulatory 
definition and standards for ``specialty occupation'' will better align 
the regulation with the statutory definition of that term. 88 FR 72870, 
728714 (Oct. 23, 2023). For example, in determining whether a position 
is a 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. The ``specific 
specialty'' requirement is only met if the degree in a specific 
specialty or specialties, or its equivalent, provides a body of highly 
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). Therefore, clarifying 
the definition of specialty occupation to state that ``each . . . 
qualifying degree field is directly related to the duties of the 
position'' more closely aligns the regulatory text with the statutory 
definition.\26\
---------------------------------------------------------------------------

    \26\ See Vision Builders, LLC v. USCIS, No. 19-CV-3159, 2020 WL 
5891546, at *4 (D.D.C. Oct. 5, 2020) (finding that USCIS logically 
read the regulatory criteria together with the statutory definition 
of specialty occupation ``to find that the term `degree' in the 
specialty-occupation criteria, 8 CFR 214.2(h)(4)(iii)(A), means one 
`in a specific specialty that is directly related to the proffered 
position.' '').
---------------------------------------------------------------------------

    Nor does DHS agree that the changes to the definition of and 
criteria for ``specialty occupation'' are based on a rescinded 
Executive order or the 2020 IFR. While some of the changes finalized 
here are similar to changes attempted through the 2020 IFR, neither 
this rule nor the IFR relied on a rescinded Executive order as 
authority for the changes. Rather, the IFR, similar to this rule, 
explained that the changes to the definition and criteria for specialty 
occupation were based on the INA and longstanding agency practice.\27\ 
Further, there are some notable changes in the specialty occupation 
provisions finalized in this rule compared to those in the IFR, such as 
the addition and clarification of the word ``normally'' to the 
specialty occupation criteria and clarifying that a position may allow 
for a range of qualifying degree fields.
---------------------------------------------------------------------------

    \27\ ``Strengthening the H-1B Nonimmigrant Visa Classification 
Program,'' 85 FR 63918, 63925 (Oct. 8. 2020) (noting that the 
requirement of a ``direct relationship'' between the required degree 
fields and duties of the position was ``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)'').
---------------------------------------------------------------------------

    DHS also disagrees that the specialty occupation changes seek to 
``revive invalidated guidance and rules.'' In June 2020, USCIS 
rescinded two policy memoranda that impacted certain computer 
occupations.\28\ In February 2021, USCIS rescinded a 2017 policy 
memorandum relating to the December 22, 2000 guidance memo on H-1B 
computer-related positions.\29\ These memoranda remain rescinded. In 
fact, the other changes to the specialty occupation provisions, 
including the clarification that ``normally does not mean always,'' are 
consistent with USCIS' rescission of those prior policy memoranda.
---------------------------------------------------------------------------

    \28\ USCIS, Policy Memorandum PM-602-0114, Recission of Policy 
Memoranda, https://www.uscis.gov/sites/default/files/document/memos/PM-602-0114_ITServeMemo.pdf (June 17, 2020).
    \29\ USCIS, Policy Memorandum PM-602-0142.1, Rescission of 2017 
Policy Memorandum PM-602-0142, https://www.uscis.gov/sites/default/files/document/memos/PM-602-0142.1_RescissionOfPM-602-0142.pdf (Feb. 
3, 2021).
---------------------------------------------------------------------------

    Comment: A trade association, citing the Executive Order on the 
Safe, Secure, and Trustworthy Development and Use of Artificial 
Intelligence \30\ and Executive Order 13932, Modernizing and Reforming 
the Assessment and Hiring of Federal Job Candidates,\31\ stated that 
several of the proposals relating to specialty occupation in the NPRM 
contradict executive branch policy directives to increase access to 
international talent by ``modernizing and streamlining visa criteria, 
interviews, and reviews'' and to give increasing preference and support 
to skills-based hiring. The association expressed concern that the 
proposed rule, including the specialty occupation definitions and 
requirements, would limit access to H-1B visas.
---------------------------------------------------------------------------

    \30\ Executive Order 14110, Safe, Secure, and Trustworthy 
Development and Use of Artificial Intelligence, 88 FR 75191 (Oct. 
30, 2023).
    \31\ Executive Order 13932, Modernizing and Reforming the 
Assessment and Hiring of Federal Job Candidates, 85 FR 39457 (June 
26, 2020).
---------------------------------------------------------------------------

    Response: DHS is cognizant of the goals of the Executive Order on 
the Safe, Secure, and Trustworthy Development and Use of Artificial 
Intelligence and has taken a number of actions consistent with the 
executive order. These not only include publishing new web page content 
for noncitizen STEM professionals and entrepreneurs with guidance on 
both the nonimmigrant and immigrant options to work in the United

[[Page 103067]]

States, but also publishing updated policy guidance for the O-1A 
nonimmigrant classification for persons of extraordinary ability, the 
EB-1 extraordinary ability and outstanding professor or researcher 
immigrant classifications, EB-2 national interest waivers for advanced 
degree professionals or persons of exceptional ability, and the 
International Entrepreneur Parole.\32\ The changes to specialty 
occupation finalized in this rule will also further the goals of the 
Executive order to ``attract and retain talent in AI and other critical 
and emerging technologies in the United States economy'' by clarifying 
that ``normally'' does not mean ``always'' within the criteria for a 
specialty occupation; clarifying that a position may allow for a range 
of qualifying degree fields, although there must be a direct 
relationship between the required field(s) and the duties of the 
position; and clarifying that ``directly related'' means a logical 
connection between the required degree (or its equivalent) and the 
duties of the position. These changes better align the regulatory 
definition of specialty occupation with the statutory definition of 
that term, and provide greater certainty by codifying current policy 
and practice into the regulation. Beyond the changes to specialty 
occupation, other provisions in this final rule also support the goals 
of the executive order, including the provisions relating to cap-
exemption and the provisions relating to beneficiary-owners. Therefore, 
DHS disagrees that the changes in this final rule contradict executive 
branch policy directives.
---------------------------------------------------------------------------

    \32\ See USCIS, Options for Noncitizen STEM Professionals to 
Work in the United States (last updated Aug. 27, 2024), https://www.uscis.gov/working-in-the-united-states/options-for-noncitizen-stem-professionals-to-work-in-the-united-states; USCIS, Options for 
Noncitizen Entrepreneurs to Work in the United States (last updated 
Aug. 27, 2024), https://www.uscis.gov/working-in-the-united-states/options-for-noncitizen-entrepreneurs-to-work-in-the-united-states; 
USCIS, Policy Alert, O-1 Nonimmigrant Status for Persons of 
Extraordinary Ability or Achievement (Jan. 21, 2022), https://www.uscis.gov/sites/default/files/document/policy-manual-updates/20220121-ExtraordinaryAbility.pdf; USCIS, Policy Alert, Evaluating 
Eligibility for Extraordinary Ability and Outstanding Researcher 
Visa Classifications, Sept. 12, 2023, https://www.uscis.gov/sites/default/files/document/policy-manual-updates/20230912-ExtraordinaryAbilityOutstandingProfessor.pdf; USCIS, International 
Entrepreneur Rule (last updated Oct. 11, 2024), https://www.uscis.gov/working-in-the-united-states/international-entrepreneur-rule; USCIS Policy Alert, International Entrepreneur 
Parole, Mar. 10, 2023, https://www.uscis.gov/sites/default/files/document/policy-manual-updates/20230310-InternationalEntrepreneurParole.pdf.
---------------------------------------------------------------------------

    Comment: A few commenters expressed concerns about administrative 
burdens resulting from the proposed changes to ``specialty 
occupation.'' For example, a form letter campaign said that the 
proposed revisions to the definition and criteria for ``specialty 
occupation'' add unnecessary burdens for employers. A couple of 
commenters wrote that the broad application of specialty occupation 
could lead adjudicators to overlook skills and experience, resulting in 
more RFEs. An advocacy group commented that the proposal could lead to 
unreasonable denials of H-1B visas and burdensome RFEs. A trade 
association agreed, adding that issuances of notices of intent to deny 
(NOIDs) would also increase administrative difficulties. Another 
commenter wrote that the proposed changes to ``specialty occupation'' 
would incentivize USCIS examiners to issue RFEs, creating burdens for 
employers.
    Response: DHS disagrees that amending the definition of specialty 
occupation will add administrative burdens for employers. As discussed 
in the NPRM, these changes are largely a codification of existing 
policies and practice. 88 FR 72870, 72874 (Oct. 23, 2023). For example, 
it is the current practice of USCIS to require the petitioner to 
demonstrate that the required degree field(s) are directly related, as 
defined in this rule, to the duties of the position.\33\ DHS does not 
expect that there will be an increase in RFEs or NOIDS as a result of 
codifying existing USCIS practices and providing clarification with 
respect to the definition of and criteria for a specialty occupation. 
It is also the current practice for USCIS to examine skills and 
experience in the course of determining a beneficiary's qualifications, 
and nothing in this rule changes this current practice. USCIS does not 
anticipate that these clarifications will cause changes for petitioners 
or add an administrative burden. Rather, codifying current practices 
adds transparency to the adjudication process and should help to 
prevent unnecessary evidence requests and delays.
---------------------------------------------------------------------------

    \33\ See, e.g., Madkudu Inc. v. USCIS, No. 5:20-cv-2653-SVK 
(N.D. Cal. Aug. 20, 2021) Settlement Agreement at 4 (``if the record 
shows that the petitioner would consider someone as qualified for 
the position based on less than a bachelor's degree in a specialized 
field directly related to the position (e.g., an associate's degree, 
a bachelor's degree in a generalized field of study without a minor, 
major, concentration, or specialization in market research, 
marketing, or research methods . . ., or a bachelor's degree in a 
field of study unrelated to the position), then the position would 
not meet the statutory and regulatory definitions of specialty 
occupation at 8 U.S.C. 1184(i)(1) and 8 CFR 214.2(h)(4)(ii).''), 
https://www.uscis.gov/sites/default/files/document/legaldocs/Madkudu-settlement-agreement.pdf (last visited Oct. 23, 2024).
---------------------------------------------------------------------------

    Comment: Numerous commenters expressed concern about the potential 
negative economic impacts associated with the specialty occupation 
provisions. For instance, a joint submission reasoned that the proposed 
specialty occupation provisions could limit the available talent pool 
and negatively impact the innovation ecosystem by imposing more 
stringent degree requirements. Another commenter similarly wrote that 
letting the ``specialty occupation'' assessment be determined by the 
semantics of a degree specialization would hinder innovation, research, 
and business growth. The commenter said that the modern job market and 
education system have allowed for fluid specialties and learning 
opportunities, and the ``disruptive rate of technological advancement'' 
has changed the talent pool such that being an expert in one field 
leads one to become an expert in another.
    Several commenters commented that the proposal could negatively 
impact industries' access to talent in emerging STEM fields, as multi-
disciplinary educational backgrounds are common in these settings. An 
advocacy group referenced an attorney's argument that ``the narrowing 
of eligibility'' for specialty occupations would impact research 
positions in ``burgeoning cross-disciplinary fields.'' A professional 
association expressed concern with the ``cross-cutting impact'' of the 
proposed regulatory changes to 8 CFR 214.2(h)(4)(ii) and (iii), 
particularly on the science and technology sectors, which the commenter 
regarded as critical research areas for U.S. economic competitiveness 
and national security. A business association and a trade association 
commented that negative impacts to businesses' hiring would also 
contravene the administration's goals to strengthen the U.S. workforce 
and, in particular, to attract professionals in the AI field. 
Additionally, other commenters said the provision would not adequately 
deal with changes in technology, and could harm individuals in IT who 
contribute to the economy but have non-IT bachelor's degrees.
    Response: DHS disagrees that codifying existing USCIS practices by 
revising the regulatory definition and standards for a ``specialty 
occupation'' to better align with the statutory definition of that term 
will have a negative effect on the economy or will hinder innovation, 
research, or business growth. DHS also disagrees that this provision 
will have a negative effect on various industries in the technology and

[[Page 103068]]

science sectors or limit these industries' access to talent trained in 
emerging STEM fields or possessing multi-disciplinary educational 
backgrounds. In clarifying the specialty occupation definition and 
criteria, DHS aims to add transparency and predictability to the 
adjudication process, not to impose more stringent degree requirements 
or standards. Overall, the changes to the specialty occupation 
provisions as revised from the proposed regulatory language--including 
clarifying the word ``normally,'' and codifying current practice to 
allow for a range of qualifying degree fields--recognize that there is 
``flexibility inherent in H-1B adjudications'' \34\ to accommodate 
emerging technological developments.
---------------------------------------------------------------------------

    \34\ See 88 FR 72870, 72871 (Oct. 23, 2023).
---------------------------------------------------------------------------

    Comment: Some commenters noted concerns across industries that the 
proposed changes to the specialty occupation definition and criteria 
would create uncertainty for H-1B professionals and their dependent 
family members, international students at U.S. higher education 
institutions, and employers both in academia and industry. The 
commenters cited to DOL permanent labor certification (PERM) data from 
FYs 2019 to 2023 showing that a sizeable percentage of H-1B holders 
with employers sponsoring them for permanent residence hold jobs that 
USCIS has ``confirmed are specialty occupations'' where: (a) the 
minimum requirements are the type of knowledge obtained through 
completion of any engineering degree; or (b) they entail job duties for 
which a business administration degree is expected. Based on this data, 
the commenters concluded that these are among the beneficiaries that 
could be ``excluded'' under the proposed regulatory text, belying DHS's 
suggestion that it is merely codifying current practice through the 
proposed rule. Similarly, an advocacy group referenced the same PERM 
application data and stated that over 20 percent of employers seeking a 
permanent labor certification accepted either a business, liberal arts, 
social studies, or any kind of engineering degree. The commenter noted 
that because this data excluded EB-1 and EB-2 National Interest 
Waivers, this was likely an undercount; and, as a result, the actual 
impact of the proposed change would be larger than implied by the 
figures referenced. Based on this data, the group concluded that the 
proposed change ``would likely be a major deviation from current policy 
of USCIS.''
    A union cited data from the 2021 National Survey of College 
Graduates and analysis by the National Foundation for American Policy 
showing that a notable percentage of U.S.-born individuals and 
temporary visa holders working in computer, biology, and mechanical 
engineering occupations have a degree other than in computer science or 
electrical engineering, health or biological sciences, and mechanical 
engineering, respectively. The union further noted a trend in academic 
departments and research centers, and in industry alike, to establish a 
diverse, interdisciplinary staff team that allows for a broad range of 
expertise and skills to pursue research projects and grants that cross 
traditional fields. A commenter urged DHS to continue to consider the 
combination of education and experience, even if the degree is not in a 
directly related field. Referencing the same data and a news article 
described above, a commenter said it was concerned with the ``directly 
related specific specialty'' requirement.
    Response: DHS disagrees that these changes to the specialty 
occupation provisions would negatively impact or create uncertainty for 
H-1B petitioners, beneficiaries (and their families), and prospective 
beneficiaries. As stated in the NPRM and in this final rule, the 
changes to the specialty occupation definition and criteria are 
intended to capture current USCIS practices. For instance, it is the 
current practice for USCIS to examine skills and experience in the 
course of determining a beneficiary's qualifications and make 
individualized determinations in each case, and nothing in this rule 
changes this current practice.
    With respect to the comments based upon DOL PERM data, DHS cannot 
speak specifically to the accuracy of the conclusions drawn by the 
commenters because the commenters did not provide the methodology used 
in examining the DOL PERM data. Further, DHS cautions against drawing 
broad conclusions about H-1B eligibility based on DOL PERM data, as 
such data are for immigrant-based classifications that have different 
eligibility criteria than H-1B specialty occupations and may be for 
different positions with different minimum requirements. For example, 
the commenters' references to positions where ``the minimum 
requirements are the type of knowledge obtained through completion of 
any engineering degree'' and positions that ``entail job duties for 
which a business administration degree is expected'' are unclear and do 
not necessarily speak to the degree requirements for the beneficiary's 
specialty occupation position nor support the commenters' assertion 
that these beneficiaries would be ``negatively impacted'' by the 
changes made in this final rule. Finally, DHS notes that the current 
practices codified by this rule were in place even during the period 
covered by the data reviewed by the commenters (FY2019-FY2023). There 
is no reason to think that codification of these practices would result 
in different adjudicative outcomes.
    Regarding the commenter's concern that data show that workers in 
various computer, engineering, and science fields have degrees outside 
of these fields, DHS notes that it is USCIS' current practice to 
examine whether there is a direct relationship between the qualifying 
degree fields and the duties of the position when determining whether 
the position is a specialty occupation. This is separate from the 
determination of whether a beneficiary qualifies for the proffered 
position. As is currently the case, a beneficiary may qualify for the 
specialty occupation through a combination of education, training, and/
or work experience. The changes to the specialty occupation provisions 
do not impact how USCIS evaluates and will continue to evaluate a 
beneficiary's qualifications. See 8 CFR 214.2(h)(4)(iii)(C) and (D).
    Comment: Some commenters argued that the NPRM failed to address 
reliance interests that would be impacted by the proposed changes to 
the specialty occupation definition. For example, one commenter said 
the failure to address reliance interests is arbitrary and capricious. 
A trade association said that the proposed language would result in 
arbitrary and capricious adjudications, cause uncertainty for employers 
and beneficiaries, and prevent employers from obtaining needed talent 
and cross-training employees. Other commenters added that the rule 
would upset the reliance interests of IT consulting companies in 
particular and disrupt their ability to fill domestic labor shortages 
and meet technology needs.
    Response: The finalized specialty occupation definition and 
criteria, as slightly modified from the NPRM, codify existing USCIS 
adjudication practices. Since these provisions are consistent with 
current USCIS practices, DHS does not agree that they will upset 
serious reliance interests.
ii. Amending the Definition of ``Specialty Occupation''
    Comment: Several commenters provided general comments in support of 
the ``directly related'' requirement. For example, a union generally 
supported requiring a direct relationship between degrees and 
occupations, clarifying that general degrees are insufficient to 
support H-1B

[[Page 103069]]

petitions, and placing the burden on H-1B petitioners to demonstrate 
the relationship between degrees and occupations. A research 
organization wrote that the proposal that each qualifying degree be 
directly related to a proffered position is consistent with the INA and 
caselaw. A commenter expressed support for requiring a ``direct 
relation'' between a beneficiary's education and the occupation. 
Similarly, a commenter said that requiring a ``direct correlation'' 
between the position and degree would ensure a ``more precise match'' 
of position duties to the skills of candidates. Another commenter 
generally stated that stricter scrutiny is required to ensure that 
beneficiaries are working in fields matching their skills. Another 
commenter generally suggested that the job that an H-1B worker is doing 
should be relevant to the degree obtained.
    A commenter expressed support for the ``directly related'' 
requirement, reasoning that it is necessary to ensure that individuals 
with specialized skills, such as those with degrees in pharmaceutical 
sciences, could work in the United States. The commenter said that the 
current ``high intake'' of individuals with undergraduate degrees in 
engineering and master's degrees in IT disadvantages these groups and 
that the proposed change would help address that disadvantage. Another 
commenter similarly stated that the ``directly related'' requirement 
would ensure that applicants with a degree that has a direct 
relationship to the position would have a chance to become employed, 
and that the requirement would regulate the job market and prevent 
applicants from trying to obtain an H-1B visa for work that is not 
related to their degree. A commenter expressed support for the 
``directly related'' requirement, stating that it would ensure that 
foreign workers who intentionally choose to pursue a degree that is 
related to a specific occupation can fill employment gaps without 
disrupting the U.S. job market. The commenter added that the proposed 
requirement would further program integrity and ensure the H-1B program 
serves its statutory purpose.
    Response: DHS agrees that requiring the degree field(s) to be 
directly related to the duties of the position is consistent with the 
INA and caselaw,\35\ supports program integrity, and continues to 
ensure that the H-1B program serves its statutory purpose by providing 
a regulatory definition of specialty occupation that is consistent with 
the existing standard. While these changes are not intended to benefit 
a particular occupation or industry, DHS believes they are generally 
beneficial for all petitioners and beneficiaries.
---------------------------------------------------------------------------

    \35\ Royal Siam Corp. v. Chertoff, 484 F.3d 139, 147 (1st Cir. 
2007) (describing ``a degree requirement in a specific specialty'' 
as ``one that relates directly to the duties and responsibilities of 
a particular position''); Caremax Inc. v. Holder, 40 F. Supp. 3d 
1182, 1187-88 (N.D. Cal. 2014) (``A position that requires 
applicants to have any bachelor's degree, or a bachelor's degree in 
a large subset of fields, can hardly be considered specialized.'').
---------------------------------------------------------------------------

    Comment: Numerous commenters expressed concern that the proposed 
changes would be too restrictive by ignoring that individuals may have 
work experience in addition to their degree, and make it difficult for 
individuals with experience to qualify for H-1B status. A few 
commenters added that the proposed changes could discourage potential 
H-1B candidates from contributing their knowledge outside their field 
of study, noting that a highly qualified individual may have acquired 
skills through job experience outside his/her field of study/degree.
    Several commenters expressed concern that the addition of the 
``directly related'' requirement could narrow the eligibility of 
potential beneficiaries. Specifically, a commenter said that the 
proposed requirement could result in individuals with experience in a 
given field being deemed ineligible while new college graduates with 
degrees in relevant fields to qualify for H-1B status. While commenting 
on the impact of the proposed specialty occupation regulations on 
highly experienced individuals, a commenter urged DHS to leave the 
regulations in their current form.
    Several commenters suggested that USCIS also consider work 
experience. These included recommendations to consider work experience 
as an equivalent to the degree name, and allowing experience as an 
alternative to the field of study. A couple of commenters were 
concerned that the proposed requirements would not provide sufficient 
flexibility for individuals who have acquired skills while on the job. 
A trade association and a few other commenters said that the ``directly 
related'' requirement would not provide leeway for individuals who are 
highly educated but want to change sectors in the middle of their 
careers. A commenter said that it understood the rationale behind the 
proposed requirement but suggested that USCIS take care in implementing 
it, as some individuals ``shine'' in positions not related to their 
educational backgrounds. A trade association referenced an example of a 
position that required expertise in programming languages but did not 
always require a specific degree, which the commenter said would likely 
make the position ineligible for H-1B initial approval or renewal, 
resulting in the position being sent ``offshore.'' Similarly, another 
commenter said that the requirement would ``stifle the diverse 
professional growth that fuels innovation,'' potentially diverting 
global talent to other destinations, as career flexibility is 
``crucial.''
    Response: Through this rulemaking, DHS is codifying existing USCIS 
practice requiring a direct relationship between the qualifying degree 
field(s) and the duties of the position. This is consistent with USCIS' 
long-standing practice and interpretation that the ``specific 
specialty'' requirement in section 214(i)(1)(B) of the INA, 8 U.S.C. 
1184(i)(1)(B), relates 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). DHS disagrees with the comments that these changes are 
overly restrictive and that they will negatively impact eligibility, 
whether for H-1B beneficiaries who are renewing their status or 
potential beneficiaries with specialized experience or skills, because 
the specialty occupation determination is separate from the 
determination of whether a beneficiary qualifies for the proffered 
position.
    As discussed above, it is already current practice for USCIS to 
examine skills and experience in the course of determining a 
beneficiary's qualifications, and nothing in this rule changes this 
current practice. USCIS will continue to make individualized 
determinations in each case. As explained in the NPRM, USCIS will 
consider whether the beneficiary has the 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. See 8 CFR 214.2(h)(4)(iii)(C)(4).
    After carefully considering the comments, DHS is not finalizing the 
proposed regulatory text of ``[t]he required specialized studies must 
be directly related to the position,'' as this language could be 
misread as stating that USCIS would only consider a beneficiary's 
specialized studies. The ``directly related'' requirement is, however, 
being retained in the definition of ``specialty occupation'' and in the 
criteria, as explained in more detail below.
    Comment: Several commenters were concerned that the proposed rule 
might

[[Page 103070]]

render individuals currently eligible for H-1B classification 
ineligible under the new specialty occupation definition and requested 
clarification on when or to whom the new definition will apply. A group 
of Federal elected officials requested clarification on how the amended 
definition of specialty occupation will be implemented consistently 
with current practice to ensure that individuals who comply with 
current H-1B regulations can remain in compliance under the new 
definition. The commenters warned against changing the requirements on 
those already granted H-1B status, as such a change would create an 
unpredictable adjudication environment and could lead to foreign-born 
professionals having to leave the country and U.S. companies losing 
employees and talent. The commenters commended the codification of 
USCIS' deference policy, and urged DHS to clarify how it will apply its 
deference policy when adjudicating H-1B petitions moving forward, given 
the proposed rule's amended definition of specialty occupation. 
Alternatively, the commenters strongly recommended that, if the new 
specialty occupation definition does in fact represent a significant 
departure from current practice, any new H-1B eligibility requirements 
that result from the proposed rule's new amended definition of 
specialty occupation only apply to individuals whose initial H-1B 
petitions are filed after the proposed rule is finalized.
    Multiple commenters, including a form letter campaign, suggested 
that DHS only apply the revised specialty occupation regulations to new 
petitions, or not apply the rule to current H-1B holders or extensions. 
Similarly, a few commenters articulated concerns about beneficiaries in 
the immigrant visa backlog who would no longer be able to continue 
their H-1B status, and others noted that it could displace individuals 
with H-1B status already in the United States. Several commenters 
expressed concern with the potential impact of the requirement on 
current H-1B beneficiaries who are already in the United States, in 
backlogs, and might experience denials as a result of not having a 
degree ``directly related'' to the position. Some commenters requested 
clarification about whether these individuals would be excluded from 
the application of the proposed requirement.
    Response: The changes being finalized in this rule become effective 
30 days after this final rule is published in the Federal Register. 
They will apply to any H-1B petition filed on or after this date, 
whether it is a petition seeking an initial grant of H-1B status or 
extension of H-1B status. Commenters did not specify why they think the 
changes to the specialty occupation definition and criteria would 
result in current H-1B nonimmigrants being unable to continue their H-
1B status or otherwise negatively impact current H-1B nonimmigrants. As 
stated previously, the changes to the specialty occupation provisions 
codify existing practices; they are not intended or expected to result 
in current H-1B nonimmigrants no longer being eligible for H-1B status 
based on employment that has already been found to be a specialty 
occupation. They also do not narrow or otherwise change the existing 
standards for how a beneficiary may qualify for the specialty 
occupation through a combination of education, training, and/or work 
experience. To the extent there is concern about any changes to 
eligibility because of the inclusion of ``directly related'' in the new 
regulatory text, the new language added in this final rule further 
clarifies that USCIS is not changing eligibility standards for 
assessing whether a position is a specialty occupation. Therefore, DHS 
does not believe it is necessary to apply this final rule only to H-1B 
petitions requesting an initial grant of H-1B status that are filed on 
or after the effective date of this rule.
    In addition, the codification of the deference policy should allay 
some of the commenters' concerns. By codifying the deference policy, 
USCIS will continue to defer to prior determinations involving the same 
parties and underlying facts, except in case of material error, 
material change in circumstances or eligibility requirements, or new 
material information adversely impacting eligibility. As stated, H-1B 
eligibility requirements, including the requirement to qualify as a 
specialty occupation, will apply to any H-1B petition filed on or after 
the effective date of this rule. However, DHS emphasizes again that the 
revisions to the regulatory language for the definition and criteria 
for a specialty occupation do not represent a change in policy, but 
rather codify existing adjudication practices and are intended to 
provide greater clarity and predictability to petitioners and 
beneficiaries. A position previously determined to meet the definition 
of a specialty occupation generally should continue to do so and a 
beneficiary previously determined to be qualified for such an 
occupation generally should remain so qualified, absent material error 
or a change in material facts.
    To the extent that commenters are worried that current H-1B 
beneficiaries who were not eligible for H-1B status in the first place 
would no longer be eligible for an extension of status under this final 
rule, this is not persuasive. USCIS is not, and has never been, 
required to approve a petition ``where eligibility has not been 
demonstrated merely because of prior approvals that were erroneous.'' 
\36\
---------------------------------------------------------------------------

    \36\ Matter of Church Scientology Int'l, 19 I&N Dec. 593, 597 
(Comm'r 1988); accord Ochoa-Castillo v. Carroll, 841 F. App'x 672, 
674-75 (5th Cir. 2021).
---------------------------------------------------------------------------

    Comment: Several commenters discussed the potential negative impact 
of the ``directly related'' requirement on hiring practices, stating 
that it would likely ``aggravate'' and extend the hiring process, or 
even eliminate the ability of companies to consider employees with 
``hands-on'' experience. A joint submission stated that the ``directly 
related'' requirement would prevent employers from establishing that an 
emerging body of knowledge was acquired through a degree in the 
``specific specialty'' or ``its equivalent.'' The commenters stated 
that an interdisciplinary approach to hiring is often required to 
attain the necessary ``highly specialized knowledge'' associated with a 
position although that knowledge might not have a specific field of 
study associated with it. A trade association said that because most 
employers hire skilled workers based on their coursework and 
experience, it would be irrelevant to show a direct relationship 
between degree and job duties. Similarly, a commenter said that the 
requirement was illogical because there is no longer a relationship 
between degrees and job duties.
    Some commenters discussed the impact on hiring practices in 
specific industries or fields, particularly in fields such as AI and 
IT. For instance, commenters stated that it is often ``indispensable'' 
to hire individuals with ``complementary specialties'' to ``form 
diverse, interdisciplinary teams.'' The joint submission added that 
employers would face additional hurdles when conducting on-campus 
recruitment as a result of the ``directly related'' requirement. A 
trade association noted that the specialized expertise required when 
hiring for roles that integrate AI across various sectors challenged 
USCIS' assumptions regarding the ``direct relevance'' of degrees. 
Another commenter stated that employers have trended towards hiring 
individuals with degrees and skills from various backgrounds, 
specifically for the AI workforce, because they need employees with 
industry knowledge,

[[Page 103071]]

not just with the traditionally associated academic background. Other 
commenters expressed concern that the proposed requirement would limit 
the ability of IT consulting firms to fill certain roles and sponsor 
foreign workers, particularly workers with work experience but degrees 
in various fields.
    A trade association expressed concern with the potential impact of 
the proposed changes to the definition of ``specialty occupation'' on 
the higher education community. The commenter stated that the proposed 
definition could hinder the ability of higher education institutions to 
hire faculty in broad departments that might include many 
subspecialties. The commenter also said that the proposed change would 
negatively impact the pipeline for growth in fields of emerging 
technology, education, research, and the economy, and deter students 
from studying in the United States. Similarly, another commenter 
expressed concern that the proposed requirement could force academic 
institutions to narrow their hiring scope, potentially diminishing 
their ability to recruit talented employees. Another trade association 
said the proposed provision would hinder the ability of educational 
institutions to hire faculty because universities organize their 
programs by broad disciplines which have departments with 
subdisciplines, and, as such, typically hire faculty that have broad 
training within a discipline in addition to knowledge across several 
subdisciplines.
    Response: As stated previously, DHS is codifying existing USCIS 
practice that there must be a direct relationship between the required 
degree field(s) and the duties of the position. As this is consistent 
with current USCIS practice, petitioners generally should not 
experience a major shift in hiring due to this rule. The specialty 
occupation changes are not intended to disadvantage any particular 
industry or occupation, nor any H-1B beneficiaries already authorized 
to work in a specialty occupation.
    These provisions also should not hinder the ability of companies to 
consider employees with experience. USCIS analyzes whether the 
proffered position is a specialty occupation (including determining if 
there is a direct relationship between the required degree(s) and the 
duties of the position) separately from its analysis of a beneficiary's 
qualifications. The final regulations will maintain the flexibility of 
the H-1B program to adapt to new and emerging technologies, education, 
and research fields, and allow companies to recruit talented workers. 
As noted in the NPRM, when applicable, USCIS also will consider whether 
the beneficiary has the 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. 
See 8 CFR 214.2(h)(4)(iii)(C)(4), (h)(4)(iii)(D). The changes to codify 
the ``directly related'' requirement do not, in any way, preclude 
petitioners from recruiting workers to form a diverse, 
interdisciplinary team.
    Comment: Several commenters expressed concerns that the ``directly 
related'' requirement would require an exact match between degree and 
occupation titles. A commenter requested removing the ``specifically 
related'' term that requires a match between the job title and degree 
name. Similarly, a couple of commenters said that there is never a 
direct match between degree names and the skills required to perform 
the duties of a position. A company stated that the ``directly 
related'' section of the proposed rule assumes a level of uniformity in 
naming degree fields across colleges and universities that does not 
exist. Another commenter stated that it would be ``highly subjective 
and dangerous'' to include the requirement, as names of degrees are 
``archaic in nature'' compared to current job titles because degree 
names do not evolve as fast as certain fields. The commenter said that 
this could result in the disqualification of certain individuals 
despite their possession of specialized knowledge. A professional 
association commented that the proposed definition would impose a 
faulty process of matching educational qualifications to occupations, 
reasoning that educational qualifications and occupations rarely have 
direct matches. The professional association stated that because 
colleges and universities have autonomy over naming and criteria, 
basing an evaluation on the name of a degree could minimize the 
qualifications of knowledgeable graduates. The commenter noted that 
these ``matching exercises'' between degrees and occupations would be 
arbitrary because they would not reflect the reality of skills required 
for positions. Other commenters stated that because the proposal would 
allow adjudicators to use their discretion to determine an exact match 
between job position and degree, many current H-1B workers might not 
meet the new criteria. A company added that adjudicators might look 
exclusively for a one-to-one match between the degree listed on a 
diploma and the relevant occupation without considering a beneficiary's 
underlying studies.
    Response: There is no requirement for a direct, exact, or one-to-
one match between the degree field(s) and job titles now, or with 
respect to this final rule. DHS acknowledges that degree field names 
may change over time and differ between universities and emphasizes 
that USCIS does not look merely at the name of the degree field. The 
changes to the definition of specialty occupation codify current 
practices and do not impose a new requirement for an ``exact match'' 
between degree field(s) and job titles or otherwise narrow eligibility 
for a specialty occupation.
    DHS further reiterates that the requirement of a direct 
relationship between a degree in a specific specialty, or its 
equivalent, and the duties of the position should not be construed as 
requiring a singular field of study. As explained in the NPRM, these 
changes merely codify existing practices. 88 FR 72870, 72874 (Oct. 23, 
2023). In some cases, the direct relationship between the degree 
field(s) that would qualify someone for the position and the duties of 
the position may not be apparent, and the petitioner may have to 
explain and provide documentation to meet its burden of demonstrating 
the relationship. As in the past, to establish a direct relationship, 
the petitioner would need to provide information regarding the 
course(s) of study associated with the qualifying degree field(s), 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. Under new 8 CFR 214.2(h)(4)(ii), 
as amended, the petitioner will continue to have the burden of 
demonstrating that there is a direct relationship between the required 
degree in a specific specialty and the duties of the position. DHS is 
also adding regulatory text to clarify the level of connection needed 
to meet the ``directly related'' requirement.
    Comment: A few commenters expressed concern with language in the 
NPRM which referred to ``educational credentials by the title of the 
degree for expediency.'' Referencing this language, which was contained 
in footnote 25 of the NPRM, a professional association and a law firm 
stated that USCIS' explanation that the use of degree titles was a 
matter of ``expediency'' and that adjudicators would still evaluate the 
relationship between the course of study and the duties of the position 
was of ``little comfort.'' The commenter reasoned that the proposed 
rule does not reflect this clarification or direct

[[Page 103072]]

adjudicators to look at the relationship between the duties of the 
position and the course of study, which the commenter stated ``includes 
the classes taken, skills and training acquired, and knowledge 
obtained.'' An advocacy group similarly expressed concern that, despite 
the NPRM's acknowledgment in footnote 25, the ``binding regulation'' 
fails to conform with current USCIS policy and include correct 
references to courses of study and job duties, instead referring to 
degree labels and names of positions. An advocacy group and company 
stated that USCIS' proposal to disqualify positions that require a 
``general degree'' based on the title of the position and degree 
program, without further consideration of job duties or course of study 
content, would be inconsistent with the agency's acknowledgment in 
footnote 25 of the NPRM. Another advocacy group also referenced 
footnote 25 and suggested that the clarification be reflected in the 
regulatory language.
    Response: DHS acknowledges the commenters' concerns about referring 
to ``the title of the degree for expediency.'' In recognition that the 
title of a degree is not determinative, and to be responsive to these 
comments, DHS is not finalizing the phrase ``such as business 
administration or liberal arts'' from the proposed regulatory text. 
While this rule finalizes the regulatory text stating that, ``A 
position is not a specialty occupation if attainment of a general 
degree, without further specialization, is sufficient to qualify for 
the position,'' the deletion of the specific references to ``business 
administration or liberal arts'' signals that USCIS will continue to 
separately evaluate whether the beneficiary's actual course of study is 
directly related to the duties of the position, and will not merely 
look to the title of the degree, consistent with current practice. When 
applicable, USCIS also will consider whether the beneficiary has the 
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, consistent with current 
practice and regulations. See 8 CFR 214.2(h)(4)(iii)(C)(4) and (5).
    Comment: Multiple commenters stated that it would be difficult to 
show an ``exact correspondence'' between degree fields and occupations 
in emerging technical fields, such as AI and cybersecurity. Similarly, 
an advocacy group and a law firm said that focusing on degree titles 
alone would not account for all of the skills that are needed to work 
in new and emerging technology fields. The commenters said that this 
could limit employers' ability to fill positions and remain competitive 
in the global marketplace. A few commenters further stated that new 
occupations or areas of study might be created as a result of 
innovation that could lead to an unclear consensus on how to classify a 
role or determine what field of study a role might require.
    Response: As with any industry, not every position in emerging 
fields will meet the definition of a specialty occupation. However, DHS 
believes that the specialty occupation provisions codified in this rule 
sufficiently accommodate emerging fields, including AI and 
cybersecurity. DHS understands that many occupations, including those 
in new and emerging fields, may not always have a singular degree 
requirement to meet the needs of the position. As stated in 8 CFR 
214.2(h)(4)(ii), a position may allow for a range of qualifying degree 
fields, provided that each of those fields is directly related to the 
duties of the position. The petitioner is not required to show an 
``exact correspondence'' between degree field(s) and the occupation. As 
finalized in this rule, ``directly related'' means that there is a 
logical connection between the degree, or its equivalent, and the 
duties of the position. See new 8 CFR 214.2(h)(4)(ii). Furthermore, as 
stated above, DHS agrees that the title of a degree is not 
determinative. Rather than looking only to the title of the degree, 
USCIS will continue to separately evaluate whether the underlying 
course of study is directly related to the duties of the position. The 
regulatory text, as finalized, offers flexibility to the specialty 
occupation determination, including to occupations in emerging fields, 
while better aligning with the statutory requirements for a specialty 
occupation.
    Comment: An advocacy group disputed the NPRM's assertion that an 
engineering degree field's title must exactly match the title of an 
engineering position for the two to be related. The commenter reasoned 
that companies hire individuals with STEM degrees based on the 
knowledge and skill sets gained through the STEM programs. A law firm 
stated that computer science and computer engineering courses are an 
essential component of every engineering field of study. As such, the 
commenter suggested that any engineering degree that included computer 
science or computer engineering courses be considered ``directly 
related'' to a software developer occupation.
    Response: Regarding the commenter's concern about employers 
accepting engineering degrees, DHS is not suggesting that employers 
cannot accept any engineering degree for their positions. Rather, DHS 
is clarifying that a petition listing a requirement of any engineering 
degree in any field of engineering for a position such as a software 
developer would generally not satisfy the statutory requirement, as it 
is unlikely the petitioner could establish how the fields of study 
within any engineering degree provide a body of highly specialized 
knowledge directly relating to the duties and responsibilities of the 
software developer position. This is because an 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 seemingly unrelated fields. If an individual 
could qualify for a petitioner's software developer position based on 
having a seemingly unrelated engineering degree, then it generally 
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.\37\ Similarly, assertions that a 
position can be satisfied based on studies in any STEM degree field 
would generally indicate that the position does not require a ``body of 
highly specialized knowledge'' but, rather, general mathematical or 
analytical skills. In such scenarios, the requirements of INA sections 
214(i)(1)(A) and (B), 8 U.S.C. 1184(i)(1)(A) and (B), would not be 
satisfied. The critical element is not the title of the position, but 
whether the position requires the theoretical and practical application 
of a body of highly specialized knowledge, and the attainment of a 
bachelor's or higher degree in the specific specialty, as the minimum 
for entry into the occupation as required by the INA.
---------------------------------------------------------------------------

    \37\ These examples refer to the educational credentials 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 also will consider 
whether the beneficiary has the 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. See 8 CFR 214.2(h)(4)(iii)(C)(4).
---------------------------------------------------------------------------

    Comment: Several commenters discussed the proposed ``directly 
related'' requirement's relationship with the INA, stating that the 
requirement defies the INA because the INA does not include any mention 
of the degree being

[[Page 103073]]

``directly related'' to the position. An attorney stated that there 
were no ambiguities within the statutory definition of ``specialty 
occupation'' that has been in use since 1990 that necessitated the 
addition of a ``direct relationship'' element to the definition.
    A few commenters stated that the proposed requirement did not 
``faithfully interpret'' the INA. A couple of trade associations and a 
joint submission stated that the ``directly related'' requirement would 
not be in alignment with longstanding USCIS practices. An advocacy 
group stated that the requirement that a beneficiary's degree be 
related to the position was not equivalent to the ``long-established'' 
interpretation of the INA, which the commenter said has been focused on 
adjudicating H-1B petitions based on skills and knowledge gained from 
courses of study and the job duties of the position, not the name of 
their degree, or the name of the position.
    Another advocacy group referenced an attorney's argument that 
expressed concern with the proposed definition of ``specialty 
occupation,'' reasoning that there was no requirement in INA sec. 
214(i)(1) that specialized studies must be directly related to the 
position. The attorney added that while a lawyer would qualify as a 
specialty occupation under the proposed language, that INA section 
reads more broadly, and as such, a marketing analyst should also 
qualify despite the occupation requiring degrees in more diverse 
fields. Referencing the same argument, another commenter stated that no 
requirement under the INA matches the new definition of specialty 
occupation. An advocacy group and another commenter stated that 
requiring a degree to be in a ``directly related specific specialty'' 
was absent from the INA. Another professional association specifically 
stated that the ``directly related specific specialty'' standard 
rewrote the authorizing statute through regulation by calling for a 
precise match between the degree and the occupation that is not found 
in statute.
    A joint submission expressed opposition to the NPRM's use of the 
undefined terms ``specialized studies'' and ``directly related,'' 
stating that the ``directly related'' requirement would exceed the 
statutory authority provided in the definition of a ``specialty 
occupation'' in INA sec. 214(i)(1). Specifically, the commenters stated 
that Congress created the ``body of highly specialized knowledge'' 
requirement when defining the H-1B category, and when doing so, also 
limited the fields of study that comprise the ``specific specialty'' or 
its ``equivalent.'' The commenters said that in practice, occupations 
that do not have degrees typically associated with them instead accept 
a variety of different fields of study that all provide the ``highly 
specialized knowledge'' required by the occupation.
    A trade association and a law firm stated that the ``directly 
related'' requirement in the proposed definition of ``specialty 
occupation'' exceeds the statutory requirements of the INA. 
Specifically, the commenters stated that the INA definition provides a 
``substantially broader standard'' by stating that the requirement of a 
degree in the specialty or ``its equivalent'' can form the basis of a 
specialty occupation. The commenters added that ``equivalent'' was 
interpreted by a district court in Tapis Int'l v. INS \38\ to encompass 
``various combinations of academic and experience-based training'' and 
that it ``defies logic'' to limit the degree requirement of ``specialty 
occupation'' to only positions where a specific degree is offered. 
Therefore, the commenters stated that Tapis precludes the 
``impermissible limitations'' that USCIS seeks to impose through the 
``directly related'' requirement in the NPRM and that the statutory 
language permits a position to qualify as a specialty occupation when 
it requires a non-specialized degree combined with specialized 
experience, training, or coursework that is ``the equivalent'' of a 
specialized degree. The commenters concluded that the ``directly 
related'' standard contradicts the ``clear language of the statute'' 
and is, thus, ultra vires, impermissible, and must be removed to ensure 
that the regulatory language remains consistent with INA sec. 
214(i)(1). Similarly, several commenters referenced INA sec. 214(i)(1) 
and said that the phrase ``or its equivalent'' broadens the requirement 
for a bachelor's degree to also encompass ``not only skill, knowledge, 
work experience, or training . . . but also various combinations of 
academic and experience-based training,'' and thus an occupation that 
requires a generalized degree but also specialized experience or 
training should be considered a specialty occupation. Similarly, a 
professional association and a law firm stated that the ``directly 
related specific specialty'' requirement contradicted the INA, 
reasoning that the INA does not specify that a degree must be directly 
related to a specific specialty. As such, the commenters stated that 
the proposed language ``impermissibly narrows'' the language of 
``specialty occupation'' under INA sec. 214(i)(1). Referencing Tapis 
Int'l v. INS, the commenters stated that the knowledge and skills 
obtained through the degree, not the title of the degree, is what is 
important in the consideration of a ``specialty occupation,'' but that 
the language of the proposed rule fails to consider the skills that 
beneficiaries gain through the attainment of a bachelor's degree and 
industry experience. The professional association concluded that the 
proposed language would narrow the types of positions that can qualify 
as a specialty occupation, including positions currently held by H-1B 
workers, potentially nullifying the proposed deference provisions.
---------------------------------------------------------------------------

    \38\ 94 F. Supp. 2d 172, 175-76 (D. Mass. 2000).
---------------------------------------------------------------------------

    Response: DHS disagrees that the ``directly related'' requirement 
is inconsistent with or exceeds the statutory requirements of the INA. 
DHS further disagrees that this requirement would be inconsistent with 
longstanding USCIS practice. While INA section 214(i)(1) does not 
contain the exact phrase ``directly related,'' consonant with INA 
section 214(i)(1), USCIS has consistently interpreted the term 
``degree'' to mean not just any baccalaureate or higher degree, but one 
in a specific specialty that is directly related to the proffered 
position. See Royal Siam Corp. v. Chertoff, 484 F.3d 139, 147 (1st Cir. 
2007) (describing ``a degree requirement in a specific specialty'' as 
``one that relates directly to the duties and responsibilities of a 
particular position''). To demonstrate that a job requires the 
theoretical and practical application of a body of highly specialized 
knowledge as required by INA section 2l4(i)(l), a petitioner must 
establish that the position requires the attainment of a bachelor's or 
higher degree in a specialized field of study or its equivalent. USCIS 
has long required there to be a close correlation between the required 
specialized studies and the position.
    The ``directly related'' requirement does not mean that a specialty 
occupation position cannot accept degrees in a variety of different 
fields of study, provided that each field of study provides the 
``highly specialized knowledge'' required by the occupation. While the 
statutory ``the'' and the regulatory ``a'' are both interpreted to 
denote a singular ``specialty,'' this should not be misconstrued with 
necessarily requiring a singular academic major or field of study. In 
cases where the petitioner lists multiple disparate fields of study as 
the minimum entry requirement for a position, the petitioner must 
establish how each field of study is in a ``specific specialty'' that 
is directly related to the duties and responsibilities of the

[[Page 103074]]

particular position (i.e., the applied body or bodies of highly 
specialized knowledge), consistent with the statutory definition.
    Further, DHS disagrees that the ``directly related'' requirement 
conflicts with Tapis Int'l v. INS.\39\ It appears the commenters have 
conflated the issue of a position's qualification as a specialty 
occupation with the issue of a beneficiary's qualification for the 
position. A beneficiary's credentials to perform a particular job are 
relevant only when the job is first found to qualify as a specialty 
occupation. Cf. Matter of Michael Hertz Assocs., 19 I&N Dec. 558, 560 
(Comm'r 1988) (``The facts of a beneficiary's background only come at 
issue after it is found that the position in which the petitioner 
intends to employ him falls within [a specialty occupation].'').
---------------------------------------------------------------------------

    \39\ In any event, USCIS is not bound to follow the published 
decisions of a district court, even in cases arising in the same 
judicial district. See, e.g., Matter of Rosales Vargas, 27 I&N Dec. 
745, 749 n.7 (BIA 2020); Matter of K-S-, 20 I&N Dec. 715, 718-19 
(BIA 1993).
---------------------------------------------------------------------------

    Comment: Several commenters discussed USCIS' consideration of 
specialized experience, skills, and training in addition to degree 
requirements with respect to the ``directly related'' requirement. Many 
commenters suggested that rather than focusing on degree titles alone, 
USCIS should evaluate potential beneficiaries on their overall 
education, including course of study, extracurricular, and skill 
development. A couple of commenters suggested that instead of requiring 
a ``direct relationship'' between the degree and position, USCIS should 
ensure that individuals have the required skill set for the job. Many 
commenters stated that the definition should be expanded to include 
consideration of direct work experience. Similarly, many commenters 
urged DHS to consider adding language that allows USCIS to consider 
coursework and ``courses of study,'' along with an employer's 
explanation of how a degree is directly related to a position. Another 
commenter requested that USCIS clarify that ``courses of study'' are 
relevant rather than the degree field, and that ``job duties'' are 
relevant rather than the job title of the position. Other commenters 
urged USCIS to consider the candidate's certifications as a better 
indicator of their skill level instead of relying on the degree 
obtained.
    A law firm expressed concern that the proposed ``direct 
relationship'' requirement might cause adjudicating officers to 
exercise ``unintended'' discretion in their willingness to look at the 
totality of a beneficiary's educational studies. The commenter 
suggested that the Department could codify existing practice and 
eliminate future ambiguity by modifying the proposed definition of 
``specialty occupation'' to include a provision at the end that states, 
``The relatedness of specialized studies may be established through an 
evaluation of the coursework (and applications of that coursework) that 
comprise the degree.''
    Response: DHS is codifying existing USCIS practice that there must 
be a direct relationship between the required degree field(s) and the 
duties of the position. Codifying the ``direct relationship'' 
requirement does not impact existing current practices that already 
allow for consideration of a beneficiary's coursework, experience, and 
skills, which is a separate issue pertaining to a beneficiary's 
qualifications for a specialty occupation. As explained above, USCIS 
will continue to separately evaluate 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. USCIS also will continue to 
consider whether the beneficiary has the 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. See 8 CFR 214.2(h)(4)(iii)(C)(4), 
(h)(4)(iii)(D).
    That said, DHS recognizes that the proposed regulatory text may 
have been confusing in some regards and is making some changes to 
address these concerns. First, DHS will not finalize the sentence, 
``The required specialized studies must be directly related to the 
position,'' as this particular sentence may have incorrectly suggested 
that USCIS would only look to the degree even when evaluating a 
beneficiary's qualifications to perform the specialty occupation 
instead of considering a beneficiary's experience, training, and other 
pertinent skills.\40\ See new 8 CFR 214.2(h)(4)(ii). DHS is also 
deleting references to ``business administration'' and ``liberal arts'' 
so as to not suggest that degree titles are determinative in the 
specialty occupation assessment. See id. DHS is also incorporating 
language to refer to the ``duties of the position'' to allay 
commenters' concerns about the importance of examining the job duties 
of the position in addition to the degree title. Id. Consistent with 
current practice, USCIS will continue to separately evaluate 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 also will continue to consider whether the 
beneficiary has the 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. 
See 8 CFR 214.2(h)(4)(iii)(C)(4). Further, DHS is amending the proposed 
sentence, ``A position may allow a range of degrees or apply multiple 
bodies of highly specialized knowledge, provided that each of those 
qualifying degree fields is directly related to the position,'' to 
state that ``A position may allow for a range of qualifying degree 
fields, provided that each of those fields is directly related to the 
duties of the position.'' New 8 CFR 214.2(h)(4)(ii). This revision is 
intended to better codify longstanding USCIS practice of interpreting 
the degree requirement ``in a specific specialty'' as ``one that 
relates directly to the duties and responsibilities of a particular 
position.'' \41\ DHS is also adding regulatory text to clarify the 
level of connection needed to meet the ``directly related'' 
requirement.\42\
---------------------------------------------------------------------------

    \40\ Not finalizing this sentence, however, does not indicate a 
change to deviate from current practice, and the ``directly 
related'' requirement will be finalized elsewhere in the specialty 
occupation definition and criteria, consistent with current practice 
and case law.
    \41\ See Royal Siam Corp. v. Chertoff, 484 F.3d 139, 147 (1st 
Cir. 2007) (describing ``a degree requirement in a specific 
specialty'' as ``one that relates directly to the duties and 
responsibilities of a particular position'').
    \42\ See id.
---------------------------------------------------------------------------

    Comment: Several commenters asked DHS to clarify the standard for 
``directly related,'' or alternatively, recommended that USCIS remove 
the ``directly related'' requirement from the ``specialty occupation'' 
definition altogether. A joint submission expressed concern that the 
proposed regulatory text would change adjudications such that the 
agency would no longer focus on job duties and courses of study as 
required by statute. One commenter suggested that either the Department 
issue a supplemental notice withdrawing the ``directly related'' 
provision from the revised definition of ``specialty occupation,'' or, 
at a minimum, that it issue a supplemental notice that ``cur[es] the 
specific identified deficiencies'' and provides the public with 
adequate time to submit additional comments. Similarly, a legal 
services provider stated that while it accepted the requirement that a 
degree be ``related'' to the position, the inclusion of ``directly'' as 
a qualifier might limit eligibility for H-1B petitions, introduce more 
subjectivity among adjudicators, and lead to a rise in RFEs and 
denials. As such, the

[[Page 103075]]

commenter concluded that USCIS should remove ``directly'' from the 
definition, as maintaining the requirement that a degree be ``related'' 
would be sufficient.
    Some commenters provided alternative language to better clarify the 
standard for ``directly related.'' A professional association suggested 
that if USCIS were to include a term to dictate the level at which a 
degree must be related to the duties of the position, it should use 
``rationally related'' instead of ``directly related.'' The commenter 
reasoned that the flexibility provided in the term ``rationally 
related'' is needed to adapt to today's environment where occupations 
for certain specialties require diverse sets of expertise. An attorney 
also said that the proposed rule does not precisely define ``direct 
relationship.'' Referencing the NPRM's text on page 72875 describing 
how petitioners would establish a ``direct relationship,'' the 
commenter requested that DHS clarify what ``connection'' means in the 
text. Referencing the sentence ``The `specific specialty' requirement 
is only met if the degree . . . provides a body of highly specialized 
knowledge directly related to the duties and responsibilities of the 
particular position'' on page 72875 of the NPRM, a professional 
association suggested USCIS replace ``degree'' with ``education'' and 
remove the word ``directly'' from the sentence. The commenter stated 
that these suggestions would be more consistent with the statutory 
definition of ``specialty occupation'' found in INA secs. 
101(a)(15)(H)(i)(b) and 214(i)(l).
    Response: To provide clarity on the level of connection needed to 
meet the ``directly related'' requirement, DHS is adding regulatory 
text to state that, `` `[d]irectly related' means that there is a 
logical connection between the degree, or its equivalent, and the 
duties of the position.'' New 8 CFR 214.2(h)(4)(ii).
    Considering this explanation, DHS declines to remove the ``directly 
related'' requirement from the specialty occupation definition. 
Moreover, the requirement to show that there is a direct relationship 
between the required degree in a specific specialty and the duties of 
the position is not a new requirement. Rather it is consistent with 
USCIS' long-standing practice. This requirement helps maintain program 
integrity and DHS believes that reducing this to a lower standard by 
removing the ``directly related'' standard altogether could open 
loopholes in the program.
    Comment: Several commenters discussed the evidentiary requirements 
associated with the ``directly related'' requirement for petitioners. A 
company said DHS should clarify how an employer can demonstrate the 
beneficiary would fill a specialty occupation. Another company urged 
DHS to clarify the types of evidence that could be used to establish 
how a degree relates to an occupation. A few commenters similarly 
stated that the final rule should detail what additional evidence--such 
as coursework, transcripts, explanations of job duties, records of 
practical training, and credentials--could be submitted to demonstrate 
that beneficiaries are sufficiently qualified to complete the duties of 
the position. A company stated that the proposed rule provides no 
specific detail or criteria related to the level of connection that 
would be sufficient to demonstrate a direct relationship between the 
required degree field(s) and the duties of the position. The commenter 
asked DHS a variety of questions about the information that petitioners 
would be required to provide related to core coursework, technical 
skills and proficiencies, electives, and other topics. Specifically, 
the commenter asked if the connection is established by showing 
foundational relevance of coursework to the occupation's duties, or if 
it requires connecting a specific set of technical skills and 
proficiencies gained from coursework to those used in day-to-day 
responsibilities. The commenter further asked if is appropriate to show 
coursework in technical skills and proficiencies that are essential 
precursors to those used on the job, whether the connection is relevant 
only if it involves the core curriculum, or whether electives carry 
equal weight. The commenter also asked what percentage of the 
beneficiary's coursework must have the requisite connection, and how 
much explanation is necessary to properly establish any of these 
potential dimensions of connection.
    A commenter expressed concern that the proposed requirement would 
incentivize USCIS adjudicators to issue additional RFEs, thus 
increasing the burden on employers. An attorney expressed similar 
concern that the ``direct relationship'' requirement would make the H-
1B program more burdensome and inefficient by creating an additional 
evidentiary element. The commenter stated that certain occupations are 
open to individuals with various degrees, but that the ``direct 
relationship'' requirement would require employers to both show that 
the beneficiary possesses a relevant degree and provide documentation 
of how each degree field relates to the proposed job. The commenter 
said USCIS did not explain how this would increase efficiency or how 
employers could meet this requirement. An attorney said that instead of 
requiring petitioners to show a ``direct relationship'' between the 
degree and duties of the position, USCIS should accept attestations 
from employers that a beneficiary's skill set was obtained through 
their education. The commenter reasoned that the proposed requirement 
would create an additional burden on employers and waste USCIS time by 
requiring adjudicators to verify the connection between the job duties 
and the degree attained. The commenter concluded that USCIS should keep 
the current policy in place or provide more flexibility to employers.
    Response: As noted above, DHS is adding regulatory text to clarify 
that ``directly related'' means ``a logical connection between the 
degree, or its equivalent, and the duties of the position.'' The burden 
of proof remains on the petitioner to demonstrate, by a preponderance 
of the evidence, a logical connection between the qualifying degree 
field(s) and the duties of the position. As in the past, the petitioner 
would need to provide information regarding the course(s) of study 
associated with the required degree(s) (or its equivalent), and the 
duties of the proffered position, and demonstrate the connection 
between the course of study and the duties of the position. Relevant 
supporting evidence could include, but is not limited to, information 
about the established curriculum of courses leading to the specified 
degree(s), course descriptions or syllabi, and information explaining 
how such a curriculum and coursework is necessary to perform the duties 
of the position. DHS reiterates that each petition is reviewed on a 
case-by-case basis taking into consideration the totality of the 
evidence, and, therefore, DHS will not require any specific type of 
evidence or an exact percentage of coursework to establish the 
requisite connection.
    Commenters also asked whether relevant evidence of whether a 
position is a specialty occupation could include transcripts listing 
the beneficiary's coursework, records of the beneficiary's practical 
training, professional certificates, and other credible evidence 
demonstrating the beneficiary's technical skills and proficiencies. 
USCIS may consider such evidence relevant if the petitioner were able 
to demonstrate that the submitted evidence were representative of the 
typical coursework, skills, and/or proficiencies needed to attain the 
required degree(s). Generally, however,

[[Page 103076]]

these types of evidence are more relevant to the determination of the 
beneficiary's qualification for the offered position, which is a 
separate issue from whether the petitioner's offered position qualifies 
as a specialty occupation. Further, a general attestation from the 
employer that a beneficiary's skill set was obtained through their 
education, without any additional evidence, may be insufficient to 
establish that a beneficiary is qualified to perform the duties of the 
position.
    Comment: Several other commenters expressed concern with the 
``directly related'' requirement because it would effectively require a 
degree in a further ``subspecialty'' (such as chemical engineering) 
rather than a degree within a broader specialty field (such as 
engineering). The commenters stated that this change would not be 
supported by the INA, as the ``directly related'' requirement does not 
exist within the statutory text of the INA, as reaffirmed in 
InspectionXpert Corp. v. Cuccinelli, 2020 WL 1062821 (M.D.N.C. Mar. 5, 
2020). In that case, the commenters stated, the court held that the INA 
defines ``professions,'' which are the basis of the specialty 
occupation requirement, at the ``categorical level'' rather than the 
subspecialty level and ``specifically includes'' that ``an engineering 
degree requirement meets the specialty occupation requirement.'' The 
commenters said that the proposed rule repeats the same error as the 
previous rule, specifically in its treatment of engineering degrees. As 
a result, the commenters concluded that the proposed rule conflicts 
with the INA. One of the commenters added that the proposed rule's 
``caution'' that the ``directly related'' requirement is not construed 
as ``requiring a singular field of study'' did not align with 
InspectionXpert Corp., as it ``does not cure the error of imposing a 
subspecialty requirement in the first place.''
    A trade association and a law firm had significant concerns with 
the NPRM's discussion of engineering degrees, saying such language was 
``impermissibly narrow'' and inconsistent with InspectionXpert Corp.'s 
holding ``that the statute does not require specialty occupations to be 
subspecialties.'' These commenters urged USCIS to recognize ``the long-
standing practice of allowing employers to build a record to establish 
the specialized needs of their positions to qualify as specialty 
occupations, including those where the employer believes that the 
requirements of a particular position include a number of engineering 
degrees or a non-specified engineering degree.''
    Response: With this final rule, DHS is adding language to the 
definition of ``specialty occupation'' clarifying that the required 
specialized studies must be directly related to the position. While 
commenters are correct that INA section 214(i), 8 U.S.C. 1184(i), does 
not use the term ``directly related,'' the statute does refer to 
application of a body of highly specialized knowledge and attainment of 
a bachelor's or higher degree in the specific specialty (or its 
equivalent) as a minimum for entry into the occupation. DHS 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. The ``specific specialty'' requirement is only met if the 
degree in a specific specialty or specialties, or equivalent, provides 
a body of highly specialized knowledge directly related to the duties 
and responsibilities of the particular position as required by INA 
214(i)(1)(A). See Royal Siam Corp. v. Chertoff, 484 F.3d 139, 147 (1st 
Cir. 2007) (describing ``a degree requirement in a specific specialty'' 
as ``one that relates directly to the duties and responsibilities of a 
particular position''); Caremax Inc. v. Holder, 40 F. Supp. 3d 1182, 
1187-88 (N.D. Cal. 2014) (``A position that requires applicants to have 
any bachelor's degree, or a bachelor's degree in a large subset of 
fields, can hardly be considered specialized.''). Because an occupation 
may involve application of multiple bodies of highly specialized 
knowledge, ``specific specialty'' is not limited to one degree field, 
or its equivalent, but may include multiple degree fields, or 
equivalents, that provide the body of highly specialized knowledge to 
be applied when performing the occupation. The requirement that each 
degree field, or its equivalent, be directly related to the position is 
the best interpretation of the statutory text and consistent with 
existing USCIS practice.\43\
---------------------------------------------------------------------------

    \43\ See, e.g., Madkudu Inc. v. USCIS, No. 5:20-cv-2653-SVK 
(N.D. Cal. Aug. 20, 2021) Settlement Agreement at 4 (``if the record 
shows that the petitioner would consider someone as qualified for 
the position based on less than a bachelor's degree in a specialized 
field directly related to the position (e.g., an associate's degree, 
a bachelor's degree in a generalized field of study without a minor, 
major, concentration, or specialization in market research, 
marketing, or research methods . . ., or a bachelor's degree in a 
field of study unrelated to the position), then the position would 
not meet the statutory and regulatory definitions of specialty 
occupation at 8 U.S.C. 1184(i)(1) and 8 CFR 214.2(h)(4)(ii).''), 
https://www.uscis.gov/sites/default/files/document/legal-docs/Madkudu-settlement-agreement.pdf (last visited Oct. 23, 2024).
---------------------------------------------------------------------------

    DHS does not agree with commenters that the requirement that the 
specialized studies must be directly related to the position is 
inconsistent with the district court's unpublished decision in 
InspectionXpert v. Cuccinelli.\44\ In that case, the court found that 
USCIS' interpretation of the term ``degree'' in 8 CFR 
214.2(h)(4)(iii)(A)(1) as ``requiring a degree in one singular 
subspecialty'' was not entitled to deference. Again, this final rule 
revises 8 CFR 214.2(h)(4)(iii)(A)(1) so that it no longer ambiguously 
refers to ``a . . . degree'' and codifies that a position may allow for 
a range of qualifying degree fields, which is consistent with the 
court's holding in InspectionXpert.\45\ DHS acknowledges that the 
district court in InspectionXpert also held that ``in contrast to a 
liberal arts degree, which the Service deemed ``an [in]appropriate 
degree in a profession'' because of its ``broad[ness],'' . . . an 
engineering degree requirement meets the specialty occupation degree 
requirement.'' \46\ DHS is not suggesting that engineering, or any of 
the various fields of engineering, are not specific specialties. Nor is 
DHS suggesting that employers could never establish that ``any 
engineering degree'' is sufficient to qualify for some positions. But 
DHS is revising the regulation to clarify that the petitioner must 
establish how each qualifying degree field provides a body of highly 
specialized knowledge that is directly related to the position. In some 
instances, such as the quality engineer position in InspectionXpert, it 
may be that any engineering degree provides the body of highly 
specialized knowledge needed to perform the job. But that does not mean 
that in all cases, accepting ``any engineering degree'' as sufficient 
to qualify for the position would provide a body of highly specialized 
knowledge directly related to the duties and responsibilities of the 
particular position as required by INA 214(i)(1)(A). Where a petitioner 
will accept a range of qualifying degree fields, the petitioner must 
establish that each of those fields is directly related to the duties 
of the position. This final rule balances the District Court for the

[[Page 103077]]

Middle District of North Carolina's unpublished decision in 
InspectionXpert with other court decisions, including those of the 
District Court for Northern District of California in Caremax and the 
First Circuit Court of Appeals in Royal Siam, to revise the criteria at 
8 CFR 214.2(h)(4)(iii)(A) so that it reflects the best interpretation 
of the statute and provides greater clarity, transparency, and 
predictability for petitioners and USCIS officers.
---------------------------------------------------------------------------

    \44\ 2020 WL 1062821 (M.D.N.C. Mar. 5, 2020), report and 
recommendation adopted, 2020 WL 3470341 (Mar. 31, 2020).
    \45\ InspectionXpert, 2020 WL 1062821, at *26 (noting ``the 
Agency's longstanding construction, which recognizes that a position 
can qualify as a specialty occupation even if it permits a degree in 
more than one academic discipline''), report and recommendation 
adopted, 2020 WL 3470341 (Mar. 31, 2020).
    \46\ Id.
---------------------------------------------------------------------------

    Comment: A commenter stated that additional emphasis should be 
given in the final regulation for beneficiaries with degree minors (or 
other equivalents) in the subject matter to qualify for H-1B status, as 
allowed by the ``Madkudu settlement.'' Specifically, the commenter 
expressed concern that the reference to the ``Madkudu settlement'' in 
footnote 18 was a negative remark from the settlement agreement. The 
commenter concluded that it appeared as if USCIS wanted to ``bury the 
implications of Madkudu.''
    Response: DHS declines to codify an additional emphasis for degree 
minors. However, this does not mean that a minor cannot serve as 
further specialization for a general degree or in other circumstances. 
As stated in the Madkudu Inc. v. USCIS settlement agreement, if the 
record shows that the petitioner would consider someone as qualified 
for the position based on less than a bachelor's degree in a 
specialized field directly related to the position (e.g., an 
associate's degree, a bachelor's degree in a generalized field of study 
without a minor, major, concentration, or specialization in market 
research, marketing, or research methods, or a bachelor's degree in a 
field of study unrelated to the position), then the position would not 
meet the statutory and regulatory definitions of specialty occupation 
at 8 U.S.C. 1184(i)(1) and 8 CFR 214.2(h)(4)(ii).\47\ Conversely, if 
the petitioner identifies a general degree with an official major, 
minor, concentration, or specialization, and establishes how that 
general degree plus the major, minor, concentration, or specialization 
equates to a bachelor's degree in a specific specialty directly related 
to the duties and responsibilities of the position, the position may 
qualify as a specialty occupation. Further, DHS is finalizing 
regulatory text stating that, ``a position is not a specialty 
occupation if attainment of a general degree, without further 
specialization, is sufficient to qualify for the position.'' 8 CFR 
214.2(h)(4)(ii). As this additional regulatory text is in line with the 
Madkudu settlement agreement,\48\ DHS disagrees with the commenter's 
allegation that it is ``burying the implications of Madkudu'' or that 
further revisions are needed.
---------------------------------------------------------------------------

    \47\ See Madkudu Inc. v. USCIS, No. 5:20-cv-2653-SVK (N.D. Cal. 
Aug. 20, 2021) Settlement Agreement at 4, https://www.uscis.gov/sites/default/files/document/legal-docs/Madkudu-settlement-agreement.pdf (last visited Oct. 23, 2024).
    \48\ See Madkudu Inc. v. USCIS, No. 5:20-cv-2653-SVK (N.D. Cal. 
Aug. 20, 2021) Settlement Agreement at 4, https://www.uscis.gov/sites/default/files/document/legal-docs/Madkudu-settlement-agreement.pdf (last visited Oct. 23, 2024).
---------------------------------------------------------------------------

    Comment: Numerous commenters discussed the ``directly related'' 
requirement's relationship with E.O. 14110, ``Safe, Secure, and 
Trustworthy Development and Use of Artificial Intelligence.'' A 
commenter stated that the ``directly related'' requirement was a 
``direct violation'' of E.O. 14110, and suggested USCIS needed to 
instead expand the definition to achieve the goals of the E.O. A 
professional association expressed concern that while the E.O. calls 
for ``modernizing immigration pathways for experts in AI,'' the 
proposed rule would potentially exclude experts from H-1B eligibility 
by focusing on the name of their degree and not the ``sum total of 
their courses of study and experience.'' The commenter referenced an 
article stating that adjudicators could deny H-1B petitions where the 
degree does not match what adjudicators believe is required to perform 
the role, but that in ``fast-evolving jobs like those in AI,'' the 
requirements to perform the role could change quickly. The professional 
association concluded by referencing examples of how these issues 
``have already been highlighted in previous litigation involving 
similar regulatory proposals.'' A Federal elected official also 
expressed concern that the requiring proof that a degree is ``directly 
related'' to the duties of a position created unnecessary hurdles for 
employers that contradicted trends in hiring across emerging technology 
fields, and thus, would contravene the directive of E.O. 14110. Another 
commenter added that this provision would deprive the economy of the 
AI, technology, and national security talent that E.O. 14110 aimed to 
attract.
    An advocacy group stated that the proposed language violated E.O. 
14110 by limiting what degrees and positions could qualify for 
specialty occupations, preventing individuals from working in the 
United States, and therefore making it less likely the United States 
could remain a top destination for the world's talent. The commenter 
stated that the proposed rule could have the ``exact opposite effect'' 
of E.O. 14110 by allowing adjudicators to deny H-1B petition where the 
degree field does not ``precisely match'' what adjudicators believe is 
required to perform the role. The commenter added that currently USCIS 
often looks at actual coursework rather than the degree field, which 
would likely change if the proposed language took effect in its current 
form. Similarly, a trade association stated that the ``directly related 
specific specialty'' language ran counter to E.O. 14110 and would 
encourage adjudicators to deny H-1B petitions where the degree field 
does not match what they believe is required to perform the role.
    A company stated that the proposed ``directly related'' requirement 
would not allow a path for skills or relevant coursework to supplement 
what the specific degree title might be missing. The commenter stated 
that this seems to run counter to E.O. 14110, as employees seeking to 
fill positions in emerging technology, and specifically AI, may not 
have a degree with a ``directly related'' name if they have completed 
extensive coursework that has resulted in the acquisition of highly 
specialized knowledge. A professional association and a joint 
submission expressed concern with the ``directly related'' degree 
requirement on the basis that it would make it ``less likely, if not 
impossible'' for E.O. 14110 to be satisfied. Both commenters also 
expressed opposition to the proposed rule's ``cautioning'' to employers 
about ``requiring the type of quantitative and problem-solving skills 
developed in an engineering degree as unlikely to be `directly related' 
to a qualifying H-1B position.'' The joint submission further stated 
that because ``emerging technologies change much faster than degree 
programs'' and the primary degrees typically required for core AI job 
duties are business administration, computer science, engineering, 
mathematics, and statistics, the proposed change might result in 
individuals who are hired to integrate AI into other fields not having 
degrees that adjudicators presume to be ``directly related'' to their 
offered position. As a result, the professional association and the 
joint submission said the ``directly related'' proposals in both the 
definition and criteria would make it difficult for DHS to achieve 
section 5.1 of E.O. 14110's goal of attracting and retaining foreign-
born STEM experts working in emerging technologies. A company similarly 
stated that the Department's ``insistence'' on a ``direct 
relationship'' appeared to contradict the directives of section 5.1 of 
E.O. 14110. Another

[[Page 103078]]

commenter expressed concern that adjudicators would deny H-1B petitions 
in situations where an individual's degree does not match what the 
adjudicators think are the requirements to perform the position. The 
company added that because emerging technologies might not yet have a 
degree program in existence, the ``direct relationship'' requirement 
might create uncertainty for employers in these fields when deciding 
whether to sponsor individuals for H-1B status.
    Similarly, a law firm stated that the proposed language would make 
it more difficult for foreign nationals seeking to be employed in STEM 
fields to qualify for an H-1B visa. Specifically, the commenter said 
that it was a common industry standard for most occupations in STEM 
fields to consider specialized experience or training in addition to a 
generalized degree, which would not be permitted under the proposed 
rule. The commenter stated that this would undermine the 
administration's efforts to attract and retain foreign talent in STEM 
fields.
    A law firm and another commenter referenced an attorney's argument 
that the ``direct-relatedness requirement'' requirement would force the 
company to ``elevate form over substance'' and inhibit their company's 
recruitment for multi-disciplinary teams, such as those in AI, 
resulting in a loss of productivity, creativity, and innovation. The 
commenters stated that this outcome would be ``precisely opposite'' of 
the administration's goals as stated in E.O. 14110 because they would 
restrict an immigration program that would attract global talent in the 
AI space. The commenters further stated that the provision was 
incompatible with the business model of the IT consulting industry and 
would negatively impact American businesses. Similarly, a professional 
association stated that the mandate of E.O. 14110 for DHS to update the 
H-1B program could be obstructed by the ``direct relationship'' 
requirement. The commenter concluded that such a requirement would 
impede not only the AI initiatives outlined in E.O. 14110 but also 
other initiatives needed to ensure ``American competitiveness and 
security.'' A business association said that the proposed language 
would prevent employers from obtaining needed talent and cross-training 
employees and undermine the goal of attracting and retaining talent in 
AI and other emerging technologies.
    Response: DHS disagrees that requiring a direct relationship 
between the required degree field(s) and the duties of the position 
would violate E.O. 14110 or create additional hurdles for foreign 
nationals seeking to work in the AI or STEM fields. As stated 
previously, and further clarified with additional regulatory text in 
this final rule, DHS is codifying and clarifying long-standing USCIS 
practice. Regarding the specific degrees, the examples in the NPRM 
referred to the educational credentials by the title of the degree for 
expediency. However, USCIS will continue to make individualized 
determinations in each case. Furthermore, this rule does not change 
current USCIS practice to examine skills and experience in the course 
of determining a beneficiary's qualifications. USCIS will continue to 
evaluate 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 also will consider whether the 
beneficiary has the 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. 
See 8 CFR 214.2(h)(4)(iii)(C)(4), (h)(4)(iii)(D).
    Comment: Multiple commenters said that the regulatory text 
regarding a ``general degree'' would lead USCIS to not evaluate the 
actual coursework and other specializations that underlie degrees and 
instead exclude many degrees based solely on their titles, 
contradicting current USCIS practices. For instance, a multi-
association submission stated that the proposed regulation fails ``to 
accurately capture the contours of preexisting agency practices'' and 
urged DHS to revise the regulatory text to ensure that adjudicators 
``examine the job duties of the position offered by the employer and 
the courses completed in a degree-granting program (U.S. baccalaureate 
or higher, or equivalent) to confirm that a specific body of knowledge 
is required to perform the job duties and that the beneficiary has 
attained that body of knowledge.''
    A law firm stated that due to specialized concentrations and 
relevant coursework, degrees like business administration that might 
appear as a ``general degree'' could contain highly specialized 
coursework that should be deemed directly related to a position. The 
commenter added that there should be explicit guidance recognizing that 
specialized knowledge for a specialty occupation is obtained from 
coursework, as shown in a transcript, and might not be obvious from the 
face of the degree itself. Specifically, the commenter suggested that 
DHS allow certain positions to accept and require that ``highly 
specialized knowledge'' can be attained from general degrees through 
specialized coursework, so long as the knowledge is ``directly 
relevant'' to the specific job requirements. Similarly, a law firm 
suggested that petitioners be provided the opportunity to establish a 
relationship between the duties of the position and the beneficiary's 
course of studies or work experience. An advocacy group stated that 
implementing the proposed change without directly clarifying this 
relationship could establish a confusing legal standard.
    Several commenters concluded that USCIS should allow for the 
demonstration of specialized knowledge through coursework, skills, 
experience, and other means. A union stated that if an occupation 
requires a generalized degree in addition to specialized experience or 
training it should still qualify as a specialty occupation. Similarly, 
an advocacy group referenced an attorney's argument, which stated that 
an occupation requiring ``a generalized degree but specialized 
experience or training'' should still qualify as a specialty 
occupation. An individual commenter additionally encouraged DHS to 
clarify the extent to which coursework can count toward equivalence to 
a degree in a specific specialty, reasoning, for example, that degrees 
in math, physics, chemistry, biology, or social sciences may involve 
courses found in computer science programs. The commenter said that 
these courses should be considered when determining whether a 
beneficiary meets the specialty occupation requirements.
    A trade association stated that many degree programs do not allow 
for a specific specialization to be declared, and thus, demonstrate 
through coursework and other means their level of specialization. 
Another commenter suggested that USCIS consider accepting on-the-job 
training and clarify whether petitioners have to seek a combination of 
education and experience to meet the ``general degree'' requirement.
    Response: DHS is finalizing the regulatory text to state that, ``A 
position is not a specialty occupation if attainment of a general 
degree, without further specialization, is sufficient to qualify for 
the position.'' New 8 CFR 214.2(h)(4)(ii). In response to comments, DHS 
has decided not to finalize the references to ``business 
administration'' and ``liberal arts'' so as not to suggest that a 
degree's title is determinative. However, USCIS will continue to 
analyze the ``specific specialty'' requirement to determine if the 
proffered position is a specialty occupation. If the minimum entry

[[Page 103079]]

requirement for a position is a general degree without further 
specialization (such as a major, minor, concentration, or 
specialization) or an explanation of what type of degree is required, 
the ``degree in the specific specialty (or its equivalent)'' 
requirement of INA section 214(i)(1)(B), 8 U.S.C. 1184(i)(1)(B), would 
not be satisfied. The opposite is also true: if a position requires a 
general degree with specialization, the position may qualify as a 
specialty occupation.
    DHS disagrees with the comments that codifying the regulatory text 
regarding a ``general degree'' would lead USCIS to ignore coursework 
and other means to demonstrate specialization and instead exclude 
degrees based solely on their titles. As with current practice, USCIS 
will not rely on a degree title and will continue to consider 
coursework in determining if a degree is a specialized degree and if 
the position is a specialty occupation. USCIS will also consider 
coursework to evaluate whether the beneficiary is qualified for the 
position, which is a separate determination from the specialty 
occupation determination.
    Comment: A commenter stated that the ``general degree'' language 
could become problematic in situations where professionals in emerging 
technologies, such as AI, have general degrees that are not specialized 
in the emerging field. Similarly, a trade association suggested that 
the proposed exclusion of general degrees be adjusted to accommodate 
situations where a person's general degree does in fact qualify them 
for a specialty occupation. The commenter stated that almost half of 
individuals with STEM degrees work in non-science and engineering 
occupations, and it is thus apparent that STEM expertise is prevalent 
across various job types. A different trade association suggested that 
USCIS include language in the final rule emphasizing that maximum 
flexibility should be applied in cases where the petitioner intends to 
employ an individual involved in AI or other emerging technologies.
    A law firm stated that the definition of ``specialty occupation'' 
must account for the rise of interdisciplinary programs that are 
augmenting traditional degrees and fields of study. The commenter 
suggested that USCIS should recognize these programs are also 
``specialized.''
    Response: DHS declines to create a carve out or regulatory language 
to ``emphasize maximum flexibility'' specifically for AI and emerging 
technologies. As stated previously, if the minimum entry requirement 
for a position is a general degree without further specialization or an 
explanation of what type of degree is required, the ``degree in the 
specific specialty (or its equivalent)'' requirement of INA section 
214(i)(1)(B), 8 U.S.C. 1184(i)(1)(B), would not be satisfied.
    USCIS separately evaluates the beneficiary's qualifications, 
including 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 also will consider whether the 
beneficiary has the 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. 
See 8 CFR 214.2(h)(4)(iii)(C)(4). Therefore, if a petitioner can 
demonstrate that the beneficiary has specialized experience and 
training in the specific specialty, such as AI or STEM fields, then the 
petitioner may be able to demonstrate that the beneficiary qualifies 
for the proffered position.
    Comment: A trade association said the ``general degree'' language 
would lead to inconsistent adjudications, higher rates of RFEs, and a 
potential increase in denials. The commenter suggested that USCIS 
clarify in the final rule that the revised language should not result 
in a narrowing of eligibility.
    Response: Since this language merely codifies current practice and 
longstanding case law, DHS does not anticipate that the revised 
language will significantly impact or restrict who is eligible for an 
H-1B or result in an increase in RFEs or denials.
    Comment: Numerous commenters discussed the inclusion of specific 
references to ``business administration or liberal arts'' degrees in 
the proposed definition of ``specialty occupation.'' Several commenters 
requested that USCIS remove references that identify particular types 
of degrees or courses of study. A law firm and a professional 
association stated that the final rule should not single out any degree 
type. Similarly, a university stated that because colleges and 
universities have autonomy in the naming of degree programs and their 
curricula, it would be problematic and unnecessary to name specific 
fields of study as too broad or general to qualify for a position in a 
specialty occupation.
    Numerous commenters expressed concern with the classification of a 
business administration degree as a ``general degree.'' A few 
commenters suggested that DHS remove the reference to ``business 
administration'' in the proposed ``general degree'' requirement. An 
advocacy group expressed concern that the proposed language would 
disqualify individuals with a Master of Business Administration (MBA) 
for ``arbitrary and capricious'' reasons.
    Numerous commenters said that business degrees should not be 
considered ``general'' because they include specialized coursework and 
provide individuals with skills that are sought after by employers and 
required to perform job duties. A commenter requested that USCIS 
clarify that a degree in ``business administration'' could be 
sufficient for a specialty occupation, as companies need certain 
skills, such as business strategy, that can only be obtained through a 
business degree. A legal services provider recommended against a 
blanket stance on degree requirements in the proposed definition, 
citing the potential for ``multi-faceted'' positions that may call for 
a broad-based business administration degree rather than a more 
specialized degree. A university stated that the ``general degree'' 
language drew a ``false equivalenc[y]'' between liberal arts degrees 
and business administration degrees. The commenter said that while 
positions that require liberal arts degrees could be reasonably argued 
to seek a level of general intellectual skill, the same could not be 
said of positions that require a degree in business administration. The 
commenter added that the proposed rule includes ``business 
specialties'' within the list of ``[bodies] of highly specialized 
knowledge in fields of human endeavor,'' and, thus, it would be 
inconsistent to suggest that a degree in business administration was 
not sufficient to qualify for a specialty occupation.
    A few commenters said that the exclusion of business degrees from 
the ``specialty occupation'' definition was misguided and based on 
outdated notions of business degrees being too generalized to qualify 
for H-1B classifications. A couple of these commenters suggested that 
USCIS allow employers to establish that a beneficiary's qualifications 
meet the specialty occupation standards by maintaining a business 
degree with a formal concentration, specialized coursework, or 
professional experience. A professional association said that degrees 
such as business administration should not be excluded from the 
definition of a ``specific specialty,'' as business administration 
degrees are generally characterized by depth and complexity, which 
provide their graduates with relevant specialized knowledge and are 
highly sought-after by U.S. employers. The association expressed 
concern that the proposed language was not in conformity with

[[Page 103080]]

how employers view degrees when assessing applications.
    Some commenters, including a joint submission, a law firm, and an 
advocacy group, stated that the characterization of business 
administration degrees as a ``general degree'' would be inconsistent 
with trends in MBA recruitment and employment. Referencing data, the 
commenters said that 94 percent of individuals with MBAs work in 
management or management-related occupations related to their degree. 
As such, the commenters stated that business administration is a 
specialized field of study, and thus, it is incorrect to consider 
business administration a ``general degree.'' A couple of these 
commenters added that the proposed language would cause economic harm 
by removing the ability for companies to hire these individuals and by 
discouraging foreign nationals from attending MBA programs in the 
United States.
    Referencing the proposed rule's example that a ``general business 
degree for a marketing position would not satisfy the specialty 
requirement,'' a company said that this example offers an incorrect 
assessment of how a business degree and the coursework entailed 
``directly relates'' to a marketing position. The commenter further 
noted that employers typically view a business degree as a normal 
requirement for a marketing position, universities offer business 
degrees with core requirements that are directly related to marketing 
roles, and occupation guides reference marketing jobs as potential 
careers for individuals with business degrees.
    A law firm stated that numerous district court decisions have held 
that a bachelor's degree in business administration was a ``general-
purpose degree that did not satisfy the ``specialty occupation'' 
definition. However, the commenter stated that because an MBA is a 
graduate degree, MBA holders should not be required to document 
``further specialization.''
    A joint submission suggested that DHS not codify the presumption 
against business administration degrees because the statutory 
definition covers the attainment of a ``body of highly specialized 
knowledge'' through a major, minor, concentration, or coursework, and 
as such, business administration degrees should be treated the same as 
other degree programs.
    Response: In response to these comments, DHS has decided not to 
include the references to ``business administration'' and ``liberal 
arts'' in the final regulatory text regarding generalized degrees. 
These changes recognize that degree titles may change over time and 
singling out specific degrees by their title alone may cause confusion.
    DHS confirms that it does not consider a master's degree in 
business administration (MBA) generally to be a general degree, and DHS 
does not equate a master's degree in business with a general degree in 
business administration. When DHS referenced business administration 
and liberal arts degrees in the NPRM this was meant to reference a 
bachelor's degree in business administration, not a master's degree. 
Note, however, that even though DHS is not codifying ``business 
administration'' in the final regulatory text, this does not mean that 
DHS views an unspecified bachelor's in business administration degree 
as a specialized degree. Instead, the decision not to codify ``business 
administration'' as an example of a general degree represents DHS's 
acknowledgement that the title of the degree alone is not determinative 
and that titles may differ among schools and evolve over time. This is 
also reflected in the regulatory text and the inclusion of ``without 
further specialization,'' as that language is intended to reflect that 
some degrees that may otherwise be considered as a general degree could 
rise to the level of a specialized degree if the course of study 
includes a major, minor, concentration, or other specialization in a 
specialized field of study and the petitioner establishes how that 
general degree plus the major, minor, concentration, or specialization 
equates to a bachelor's degree in a specific specialty, and how each 
identified specialization provides a body of highly specialized 
knowledge that is directly related to the duties and responsibilities 
of the position.
    Comment: A few commenters discussed the ``general degree'' 
requirement in relation to engineering degrees. Citing a case as 
indicating that engineering requires ``a body of highly specialized 
knowledge,'' a trade association concluded that general engineering 
degrees should be sufficient to support H-1B petitions. The commenter 
stated that Congress intended H-1B visas to be responsive and flexible 
to accommodate industry needs and that the proposal would be unduly 
restrictive.
    A few commenters referenced the example in the proposed rule that 
``any engineering degree in any field of engineering for a position of 
software developer would generally not satisfy the statutory 
requirement.'' Some commenters stated that this language was 
inconsistent with the INA, which defines the term ``profession'' to 
include ``engineers'' at a ``categorical level.'' A law firm said that 
the U.S. Bureau of Labor Statistics Occupational Outlook Handbook (OOH) 
references an engineering degree as a degree in a related field for a 
software developer position. The commenter stated that although 
universities offer distinct engineering majors, and, thus, it would be 
unlikely for employers to consider an applicant with a general 
engineering degree for a software developer (or other specialized 
role), depending on the coursework and other knowledge attained by the 
applicants, an individual with a general engineering degree could meet 
the requirements of the position. The commenter concluded that 
possession of a general degree in engineering should not automatically 
be deemed insufficient for a specialty occupation.
    A trade association suggested that USCIS issue guidance confirming 
that any engineering degree would support any engineering position in 
meeting the definition of ``specialty occupation.'' The commenter 
reasoned that this would reduce the monetary costs and time associated 
with RFEs. The commenter further stated that employers of engineers are 
aware of the requirements needed for the roles for which they are 
hiring, that these roles are specialty occupations, and that, without 
this guidance, employers would not be able to find the talent they 
require.
    Response: USCIS regularly approves H-1B petitions for qualified 
beneficiaries who are to be employed as engineers. However, DHS 
declines to codify or otherwise state that any position requiring any 
engineering degree or what the commenter describes as ``a general 
engineering degree'' will generally qualify as a specialty occupation. 
In explaining in the NPRM that the requirement of any engineering 
degree in any field of engineering for a position of software developer 
would generally not satisfy the statutory requirement, DHS is not 
saying that engineering degrees are not acceptable for specialty 
occupations. Rather, DHS is explaining that the petitioner would have 
the burden to establish how the fields of study within any engineering 
degree provide a body of highly specialized knowledge directly relating 
to the duties and responsibilities of a software developer position. 
This is because 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

[[Page 103081]]

seemingly unrelated fields. Conversely, if the petition requires an 
engineering degree with a specific specialty, such as a major, minor, 
concentration, or specialization, that is directly related to the 
duties of the position, the petitioner may be able to satisfy the 
statutory and regulatory requirement.
    DHS acknowledges that INA section 214(i) includes ``engineers'' as 
one of the occupations listed as requiring the theoretical and 
practical application of a body of highly specialized knowledge in 
fields of human endeavor. However, this does not mean that all 
positions that state that any engineering degree would be acceptable to 
qualify for the position means that the position is an engineer. DHS is 
not suggesting that engineering, or any of the various fields of 
engineering, are not specific specialties. Nor is DHS suggesting that 
employers could never establish that ``any engineering degree'' is 
sufficient to qualify for some positions. Rather, DHS acknowledges that 
an engineering degree is a specialized degree. However, just because an 
engineering degree is a specialized degree does not mean that it is 
always directly related to the position, which is a different issue. 
DHS is revising the regulation to clarify that the petitioner must 
establish how each qualifying degree field provides a body of highly 
specialized knowledge that is directly related to the position. In some 
instances, such as the quality engineer position in InspectionXpert, it 
may be that any engineering degree provides the body of highly 
specialized knowledge needed to perform the job. But that does not mean 
that in all cases, accepting ``any engineering degree'' as sufficient 
to qualify for the position would provide a body of highly specialized 
knowledge directly related to the duties and responsibilities of the 
particular position as required by INA 214(i)(1)(A). The critical 
element is whether the position actually requires the theoretical and 
practical application of a body of highly specialized knowledge, and 
the attainment of a baccalaureate or higher degree in the specific 
specialty as the minimum for entry into the occupation, as required by 
the INA.
    Comment: Several commenters discussed the legal authority of naming 
specific degrees, such as business administration or liberal arts 
degrees, as insufficient for H-1B status. A law firm and trade 
association added that disfavoring specific degrees would contradict 
the administration's National Security guidance, strategy, and E.O. 
14110. A university stated that singling out business administration as 
a degree that is insufficient to qualify for a specialty occupation 
contradicts the statutory definition of ``specialty occupation'' in 
section 214(i) of the INA and the purpose of the NPRM.
    A law firm stated that specifically referencing business 
administration or liberal arts degrees by name as insufficient to 
qualify for a specialty occupation violates precedent case law. The 
commenter referenced Residential Finance Corporation v. USCIS, which 
held that degree field names could not control whether an individual 
qualifies for H-1B status, and that USCIS must consider the ``highly 
specialized knowledge'' obtained through the courses taken to earn the 
degree. A joint submission stated that none of the cases referred to 
throughout the NPRM to justify the inclusion of ``business 
administration'' in the ``general degree'' language serve as the 
precedent case for this assertion or explain its origin. A law firm and 
joint submission stated that the cases cited by USCIS can be traced to 
Matter of Ling, 13 I&N Dec. 35 (Reg. Comm'r 1968), but noted that both 
Ling and Matter of Michael Hertz Assocs., 19 I&N Dec. 558, 560 (Comm'r 
1988) preceded the development of the ``specialty occupation'' concept 
and that neither decision references the terms ``H-1B'' or ``specialty 
occupation.'' The commenters further stated that Ling does not state 
that a business administration degree is a ``generalized degree,'' but 
instead that the profession of business administration is a generalized 
field that must be analyzed by the ``Ling test''--that the degree is a 
``realistic prerequisite'' for entry into that field. The commenters 
concluded that a business administration degree could act as a 
``realistic prerequisite'' for a position and, thus, that the proposed 
rule's provision that a business administration degree could not 
support H-1B eligibility was not found in legal precedent.
    Response: In response to commenters' concerns, DHS is not 
finalizing the specific references to ``business administration and 
liberal arts'' in the regulatory text. The decision not to finalize 
this language recognizes the commenters' concerns about not relying on 
a degree's title, consistent with the District Court for the Southern 
District of Ohio's observation in Residential Finance Corporation v. 
USCIS that ``[t]he knowledge and not the title of the degree is what is 
important.'' \49\ However, the decision not to finalize the references 
to ``business administration and liberal arts'' should not be 
misinterpreted as indicating a change in USCIS' longstanding practice 
not to recognize a bachelor's degree in business administration or 
liberal arts, without further specification, as a specialized 
degree.\50\ Consistent with longstanding agency practice and legal 
precedent, although a general-purpose bachelor's degree, such as a 
degree in business or business administration, may be a legitimate 
prerequisite for a particular position, requiring such a degree, 
without more, will not justify a conclusion that a particular position 
qualifies for classification as a specialty occupation. See, e.g., 
Royal Siam Corp., 484 F.3d 139, 147 (1st Cir. 2007) (``The 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.''); Shanti, Inc. v. Reno, 36 F. 
Supp. 2d 1151, 1162-1164 (D. Minn. 1999) (the former INS did not depart 
from established policy or precedent when concluding that a general 
degree, such as a business administration degree, without more, does 
not constitute a degree in a specialized field); Raj & Co. v. USCIS, 85 
F. Supp. 3d 1241, 1246 (W.D. Wash. 2015) (it is ``well-settled in the 
case law and USCIS's reasonable interpretations of the regulatory 
framework'' that ``a generalized bachelor['s] degree requirement is 
[in]sufficient to render a position sufficiently specialized to qualify 
for H-1B status.''); Vision Builders, LLC v. USCIS, No. 19-CV-3159, 
2020 WL 5891546, at *6 (D.D.C. Oct. 5, 2020) (citing Raj).
---------------------------------------------------------------------------

    \49\ 839 F. Supp. 2d 985, 997 (S.D. Ohio 2012).
    \50\ Note, however, that USCIS generally recognizes a master's 
or higher level of degree in business administration as a 
specialized degree.
---------------------------------------------------------------------------

    Further, these cases are consistent with Matter of Ling, 13 I&N 
Dec. 35, 36 (Reg'l Comm'r 1968) (characterizing ``business 
administration'' as ``a broad field'') and Matter of Michael Hertz 
Assocs., 19 I&N Dec. 558, 560 (Comm'r 1988) (recognizing a bachelor's 
degree in business administration, without further specialization, as 
``a degree of generalized title.''). Although these cases predate the 
current specialty occupation framework enacted by the Immigration Act 
of 1990 (IMMACT), Public Law 101-649 (Nov. 29, 1990), they are relevant 
to the extent that they demonstrate the agency's longstanding view that 
``business administration'' is a generalized field, which has since 
been reaffirmed in numerous court cases as cited above.\51\
---------------------------------------------------------------------------

    \51\ With respect to Matter of Michael Hertz Assocs., INS' prior 
requirements for members of the professions that were in effect at 
the time of that case mirrors the current definitions and standards 
for specialty occupation. See ``Temporary Alien Workers Seeking 
Classification Under the Immigration and Nationality Act,'' 56 FR 
31553, 31554 (July 11, 1991) (proposed rule) (proposing to change 
all references from ``profession'' to ``specialty occupation,'' but 
explaining that ``the same standards'' will apply and that ``[t]he 
definition and standards for an alien in a specialty occupation 
mirror the Service's current requirements for aliens who are members 
of the professions''); see also ``Temporary Alien Workers Seeking H-
1B, O, and P Classifications Under the Immigration and Nationality 
Act,'' 57 FR 12179 (Apr. 9, 1992) (interim final rule) (finalized 
the current definition of ``specialty occupation'' at 8 CFR 
214.2(h)(4)(ii)).

---------------------------------------------------------------------------

[[Page 103082]]

    Comment: Multiple commenters suggested that USCIS remove the 
``general degree'' requirement in its entirety from the proposed 
definition of ``specialty occupation.'' An advocacy group stated that 
the Department should abandon narrow regulatory language asserting that 
generalized degrees are insufficient to qualify for a specialty 
occupation.
    A trade association suggested that the language within the 
``specialty occupation'' definition that restricts qualifications to 
specific degrees or specialties be removed and updated with language 
that requires ``general degrees'' to be accompanied by documented 
experience. Similarly, an advocacy group suggested DHS add language 
codifying current practices, including requiring adjudicators to 
consider the underlying coursework of a degree along with an employer's 
explanation of how a degree is directly related to a position. Another 
trade association expressed concern with the impact of the proposed 
``general degree'' requirements on educational institutions. 
Specifically, the commenter said that USCIS' proposal to exclude 
``general'' programs from H-1B eligibility would devalue institutions' 
degree programs and harm students who have diversified their studies 
through course selection and other opportunities. The commenter 
suggested that, alternatively, USCIS could codify existing practices 
that allows for generalized degrees in addition to specialized 
experience and training in order to qualify for specialty occupations.
    Response: In response to commenters' concerns, DHS is not 
finalizing the reference to the specific degrees of ``business 
administration and liberal arts'' in the regulatory text. However, DHS 
declines to adopt the other suggested revisions, such as removing the 
``general degree'' regulatory text in its entirety.
    Regarding the suggestions that the regulation allow USCIS to 
consider coursework or allow for generalized degrees in addition to 
specialized experience and training in order to qualify for specialty 
occupations, DHS reiterates that the changes to the specialty 
occupation definition do not impact how USCIS evaluates a beneficiary's 
qualifications for a specialty occupation. USCIS will continue to 
consider the underlying coursework of a degree, as well as specialized 
experience and training, along with the employer's explanation of how a 
degree is directly related to a position.
    Comment: Several commenters expressed support for allowing a broad 
range of degrees, but also expressed concern about the requirement to 
demonstrate that each of those qualifying degree fields must be 
directly related to the proffered position. An advocacy group 
recommended that the proposed provision require that the range of 
degrees supporting an H-1B position be directly related to the 
occupation through the coursework involved in obtaining the degree, 
rather than simply by the degree itself. A law firm agreed, stating 
that particular coursework within a business degree, for example, could 
provide the specialized knowledge sufficient to support an H-1B 
petition. A research organization likewise stated that particular 
coursework could be especially relevant to occupations within AI 
development because of the relevance to AI of disciplines outside of 
computer science such as physics, philosophy, and linguistics.
    Response: In explaining that a range of qualifying degrees in 
multiple disparate fields of study may be listed as the minimum entry 
requirement for a position, DHS did not intend to discount coursework 
that may have been involved in obtaining the degree. DHS again 
reiterates that USCIS will continue to separately evaluate 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 also will consider whether the beneficiary has the 
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. See 8 CFR 
214.2(h)(4)(iii)(C)(4), (h)(4)(iii)(D). The petitioner has the burden 
of establishing 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.
    Comment: Several commenters stated that requiring petitioners to 
delineate how multiple degrees may support a specialty occupation is 
overly burdensome. The commenters recommended that petitioners only be 
required to justify why the degree of a potential beneficiary in a 
particular case relates to the occupation at issue.
    Response: In requiring that the petitioner demonstrate that the 
required specialized studies are directly related to the position, DHS 
is further clarifying the definition of specialty occupation to better 
align with the statutory definition of that term. As explained in the 
NPRM, a position may allow a range of degrees or apply multiple bodies 
of highly specialized knowledge, provided that each of those qualifying 
degree fields or each body of highly specialized knowledge is directly 
related to the position. 88 FR 72870, 72876 (Oct. 23, 2023).
    Determining whether the position is a specialty occupation is a 
separate analysis from determining whether the beneficiary is qualified 
for the position. The petitioner is required to do both. To only 
require the petitioner to justify that the degree of the beneficiary 
relates to the occupation conflates these two requirements. DHS does 
not agree that it is overly burdensome for the petitioner to establish 
how each field of study is in a specific specialty providing ``a body 
of highly specialized knowledge'' directly relates to the duties and 
responsibilities of the particular position, as is current agency 
practice, and as required by the INA and the regulatory definition.
iii. Amending the Criteria for ``Specialty Occupation''
    Comment: A commenter voiced appreciation for clarifying the 
specialty occupation criteria, which will alleviate confusion among 
U.S. employers and their employees. A company expressed general support 
for several modifications to 8 CFR 214.2(h)(4)(iii)(A). Another company 
also expressed support for clarifying the four regulatory prongs found 
at 8 CFR 214.2(h)(4)(iii)(A), writing that the proposed text eliminates 
redundancy between the second and fourth prongs.
    Response: DHS appreciates the feedback and agrees that these 
revisions will provide clarity on the criteria for ``specialty 
occupation,'' alleviate confusion for many petitioners, and eliminate 
redundancy between the second and fourth prongs.
    Comment: A trade association said that stringent criteria for 
evaluating specialty occupations could result in increased documentary 
burdens for petitioners and employers. A law firm generally stated that 
the proposed

[[Page 103083]]

amendments to the specialty occupation criteria would reduce H-1B 
approval rates and negatively impact the biotechnology, information 
technology, space technology, and financial services sectors.
    Response: Since DHS is codifying current practice through this 
provision, DHS does not anticipate that amending the criteria for 
specialty occupations will create additional documentary burdens for 
employers, reduce approval rates, or negatively impact particular 
industries or sectors. The revisions are intended to codify and clarify 
current practices and provide H-1B petitioners with more certainty as 
to the adjudication standards that apply to their petitions.
    Comment: Several commenters expressed general support for the 
proposed definition of ``normally.'' A couple of law firms cited Innova 
Sols., Inc v. Baran, in supporting the proposed definition of 
``normally.'' An advocacy group commented that the proposed definition 
of ``normally'' would be an improvement and cited the previous 
definition of ``normally'' to mean ``always'' as a misinterpretation of 
the term that the proposal would guard against. A company agreed and 
stated that it has received numerous RFEs regarding H-1B petitions 
based on the misinterpretation of ``normally'' to mean ``always.'' A 
trade association supported the proposal as establishing a clear 
guideline for adjudicators, aligning the regulations with current 
agency practices and legal precedents, and ensuring a ``more nuanced 
approach'' for when the variety and complexity of the roles do not fit 
within a rigid framework for specific degrees. The trade association 
noted that change would be especially beneficial to higher education 
institutions.
    Response: DHS agrees that the new definition of ``normally'' to 
clarify that ``normally'' does not mean ``always'' \52\ is an 
improvement that helps to ensure flexibility in adjudications. DHS also 
agrees that this change will help establish a clear guideline for 
adjudicators and align the regulations with current agency practices 
and legal precedents.
---------------------------------------------------------------------------

    \52\ See Innova Solutions, Inc. v. Baran, 983 F.3d 428, 432 (9th 
Cir 2020) (``Normally does not mean always.'').
---------------------------------------------------------------------------

    Comment: Several commenters expressed support for the change to 
clarify ``normally,'' particularly as employers increasingly look to 
consider skills-based hiring practices without running the risk that 
such practices would negatively impact their ability to obtain H-1B 
workers. For example, while expressing support for the proposed 
definition of ``normally,'' a law firm expressed appreciation for 
USCIS' responses to its questions around recruitment documentation in a 
recent public engagement and requested that those responses also be 
included in the proposed rule. As part of its responses, the commenter 
stated that USCIS recognized ``that no one factor alone, such as formal 
recruitment documentation, is determinative as to whether or not a 
particular position qualifies as a specialty occupation.'' A commenter 
from academia agreed and requested that the definition of ``normally'' 
specify that ``[n]o one factor alone, such as formal recruitment 
documentation, is determinative as to whether a particular position 
qualifies as a specialty occupation.'' Another law firm agreed and 
recommended several other changes to the proposed definition of 
``normally'' to ensure that skills-based hiring initiatives and H-1B 
employment do not conflict.
    Response: DHS agrees that the clarification of ``normally'' will 
allow petitioners to explore skills-based hiring programs and 
apprenticeship programs, where appropriate. As mentioned in the NPRM, 
DHS understands the importance of attracting and hiring individuals who 
possess certain skills. 88 FR 72870, 72871 (Oct. 23, 2023). The 
flexibility inherent in H-1B adjudications to identify job duties and 
particular positions where a bachelor's or higher degree in a specific 
specialty, or its equivalent, is normally required allows employers to 
explore where skills-based hiring is sensible. Further, DHS recognizes 
that an employer that has adopted skills-based hiring initiatives may, 
depending on the particular facts, still be able to establish that the 
particular position in which the beneficiary will be employed is a 
specialty occupation. DHS also agrees that no one factor alone, such as 
formal recruitment documentation, is determinative of whether a 
particular position qualifies as a specialty occupation but declines to 
codify this or similar language. By defining ``normally'' in the 
regulations, DHS's intent is to clarify that the petitioner does not 
have to establish that a bachelor's degree in a specific specialty or 
its equivalent is always a minimum requirement for entry into the 
occupation in the United States. DHS believes that defining 
``normally'' in the regulations is sufficient to provide H-1B 
petitioners with more certainty as to the adjudication standards that 
apply to their petitions.
    Comment: A professional association and a law firm expressed 
support for the proposed definition of ``normally'' but recommended, to 
improve clarity, that 8 CFR 214.2(h)(4)(iii)(A)(1) be amended to 
replace ``normally'' with ``usually'' or ``typically.'' The commenters 
cited a case as holding that ``normally'' and ``typically'' impose 
identical standards as used in regulations. A legal services provider 
requested that USCIS define ``normally'' to mean ``more often than 
not,'' writing that the agency could rely on ``O*Net'' data to 
demonstrate degree requirement rates for a position and improve clarity 
in the proposal.
    Response: While DHS agrees that ``normally'' and ``typically'' 
impose identical standards as used in 8 CFR 214.2(h)(4)(iii)(A)(1), DHS 
declines to replace ``normally'' with ``usually'' or ``typically'' in 
this provision. As stated in the NPRM, for these purposes there is no 
significant difference between the synonyms ``normal,'' ``usual,'' 
``typical,'' ``common,'' or ``routine,'' and DHS does not interpret 
these words to mean ``always.'' 88 FR 72870, 72876 (Oct. 23, 2023).
    DHS further declines to define ``normally'' to mean ``more often 
than not.'' Such a change would essentially require the petitioner to 
demonstrate a specific percentage (more than 50%) of positions that 
require a bachelor's degree and could potentially make it more 
difficult for petitioners to demonstrate eligibility under this 
criterion if the evidence they submit for this criterion, such as the 
OOH, does not specify a percentage. DHS also declines to wholly rely on 
O*NET data to demonstrate a degree requirement. While O*NET can be an 
informative source of general occupational information and data,\53\ 
there are gaps in the data, particularly as O*NET data does not provide 
information on whether the degrees required must be in a specific 
specialty directly related to the occupation. O*NET data may also be 
lacking for new and emerging fields of technology, or occupations not 
covered in detail. DHS again emphasizes that no one factor alone, 
including O*NET, is determinative as to whether or not a particular 
position qualifies as a specialty occupation.
---------------------------------------------------------------------------

    \53\ DOL, ETA, O*NET, O*NET OnLine, https://www.onetonline.org/ 
(last visited Dec. 9, 2024).
---------------------------------------------------------------------------

    Comment: An advocacy group recommended that the term ``normally'' 
be removed from 8 CFR 214.2(h)(4)(iii)(A) so as to require that H-1B 
specialized positions always require a degree, citing the INA in 
support of their position. A research organization agreed, citing the 
definition of a specialty occupation in INA sec. 214(i)(1) and the 2020 
IFR as

[[Page 103084]]

consistent with the commenter's interpretation. A union also stated 
that, for nursing in particular, only positions that always required a 
bachelor's degree should be eligible for H-1B classification. A 
commenter generally stated that stricter criteria for specialty 
occupation eligibility should be adopted and that many people who do 
not qualify for H-1B status are currently working on an H-1B visa.
    Response: DHS declines to remove ``normally'' from new 8 CFR 
214.2(h)(4)(iii)(A) so as to require that H-1B specialized positions 
always require a degree. DHS disagrees that this new definition is 
inconsistent with the INA and notes that the 2020 IFR was vacated. The 
inclusion of the word ``normally'' in the criteria for specialty 
occupations is not new. The specialty occupation criteria included 
``normally'' prior to IMMACT90, which created the specialty occupation 
definition and did not change the criteria. Additionally, subsequent 
regulations implementing IMMACT90 did not change the criteria or remove 
the term ``normally.'' \54\ DHS also declines to add additional 
requirements or scrutiny for particular occupations or adopt a stricter 
criterion for specialty occupation eligibility.
---------------------------------------------------------------------------

    \54\ See DOJ, INS, ``Temporary Alien Workers Seeking 
Classification Under the Immigration and Nationality Act,'' 56 FR 
61111-01 (Dec. 2, 1991); see also ``Registration Requirement for 
Petitioners Seeking To File H-1B Petitions on Behalf of Cap-Subject 
Aliens,'' 84 FR 888 (Jan. 31, 2019).
---------------------------------------------------------------------------

    Comment: A trade association commented that defining ``normally'' 
in terms of ``usual, typical, common, or routine'' would retain 
vagueness and lead to RFEs, NOIDs, and denials. The commenter stated 
that this would have especially negative impacts in STEM fields.
    Response: DHS disagrees that defining ``normally'' will lead to 
more RFEs and denials, or negatively impact certain industries. 
Defining ``normally'' to mean ``typical,'' ``common,'' or ``routine'' 
is consistent with both USCIS' current practice and, by codifying this 
practice, DHS seeks to provide H-1B petitioners with more certainty as 
to what adjudication standards apply to their petitions.
    Comment: A company commented that the proposal could lead to 
confusion and inconsistent adjudications because, the commenter 
reasoned, the criteria under paragraph (h)(4)(iii)(A) operate to refine 
the definition at 8 CFR 214.2(h)(4)(ii). The commenter recommended 
deleting the term ``also'' from paragraph (h)(4)(iii)(A) to reduce 
confusion as to what is required to satisfy the standard at paragraph 
(h)(4)(ii). A couple of trade associations agreed that the proposed 
language for paragraph (h)(4)(iii)(A) would lead to an inconsistent 
application of regulatory standards with one trade association 
referring to the current ``one of the following'' standard as producing 
the same result and leading to confusion and administrative burdens. A 
trade association agreed and stated that the proposed standard would 
result in a ``totality of the circumstances'' test similar to one 
provided in Kazarian v. USCIS, 596 F.3d 1115 (9th Cir. 2010). A legal 
services provider also agreed and added that the proposal may 
effectively raise the standard for specialty occupations.
    Response: DHS disagrees that the word ``also'' or the phrase ``one 
of the following'' in new 8 CFR 214.2(h)(4)(iii)(A) could lead to 
confusion and declines to make changes in response to these commenters. 
As explained in the NPRM, this language clarifies that meeting one of 
the regulatory criteria is a necessary part of--but not always 
sufficient for--demonstrating that a position qualifies as a specialty 
occupation. 88 FR 72870, 72876 (Oct. 23, 2023). In other words, to 
qualify as a specialty occupation, a position must meet one of the 
criteria at 8 CFR 214.2(h)(4)(iii)(A) and also must meet the definition 
of a specialty occupation as a whole. Furthermore, as pointed out in 
the NPRM, this is not new. 88 FR 72870, 72877 (Oct. 23, 2023). USCIS 
has a long-standing practice of reading and construing the criteria at 
8 CFR 214.2(h)(4)(iii)(A) in harmony with and in addition to other 
controlling regulatory provisions and with the statute as a whole.\55\ 
Therefore, DHS disagrees with the commenters that this change will 
somehow raise the standard or create a new standard for specialty 
occupation adjudications.
---------------------------------------------------------------------------

    \55\ Numerous AAO non-precedent decisions spanning several 
decades have explained that the criteria at 8 CFR 
214.2(h)(4)(iii)(A) must logically be read together with section 
214(i)(1) of the Act and 8 CFR 214.2(h)(4)(ii), and that the 
regulatory criteria must be construed in harmony with the thrust of 
the related provisions and with the statute as a whole. See, e.g., 
In Re.--, 2009 WL 4982420 (AAO Aug. 21, 2009); In Re.--, 2009 WL 
4982607 (AAO Sept. 3, 2009); In Re. 15542, 2016 WL 929725 (AAO Feb. 
22, 2016); In Re. 17442092, 2021 WL 4708199 (AAO Aug. 11, 2021); In 
Re. 21900502, 2022 WL 3211254 (AAO July 7, 2022).
---------------------------------------------------------------------------

    Comment: A professional association expressed particular concern 
about the proposed change at 8 CFR 214.2(h)(4)(iii)(A)(3), which would 
require that an H-1B employer normally require a ``U.S. baccalaureate 
or higher degree in a directly related specific specialty, or its 
equivalent, for the position.'' The commenter stated that this 
provision may not be in conformity with how hiring managers view those 
particular degrees when assessing a candidate's application. The 
commenter added that, because U.S. employers must show that its hiring 
practices for H-1B beneficiaries and American workers are identical, 
``this restriction will impose artificial and unnecessary burdens on 
the hiring of both U.S. workers and H-1B beneficiaries.'' The commenter 
concluded that ``USCIS should not seek to restrict educational 
requirements beyond what was intended in the INA and in a manner that 
is inconsistent with specific content ordinarily included in these 
degree programs.'' A company stated, without elaboration, that ``USCIS 
should also consider the ``anti-discrimination impact'' on companies 
when drafting job descriptions.''
    Response: In the NPRM, DHS proposed to add ``U.S.'' to 
``baccalaureate'' to clarify that a baccalaureate degree must be a U.S. 
degree or its foreign equivalent, and that a foreign baccalaureate is 
not necessarily an equivalent to a U.S. degree. 88 FR 72870, 72877 
(Oct. 23, 2023). DHS believes that these commenters misunderstood the 
proposed changes to mean that an individual must have earned a degree 
in the United States to be eligible for H-1B nonimmigrant 
classification. That is not the case. This revision reflects 
longstanding practice and a consistent standard that will better align 
the regulation discussing the position requirement at 8 CFR 
214.2(h)(4)(iii)(A) with the statutory requirement 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'' at INA 
section 214(i)(1)(B), 8 U.S.C. 1184(i)(1)(B), as well as the regulatory 
requirement that an H-1B beneficiary must have a U.S. baccalaureate 
degree, or its equivalent, at 8 CFR 214.2(h)(4)(iii)(C)(1). Therefore, 
DHS declines to make any changes in response to these comments and will 
finalize the regulatory language as proposed.
    Comment: A few commenters discussed the proposed criterion's 
references to the DOL's OOH. An attorney suggested that any reference 
to the OOH should be removed from the provisions since it never was 
meant to establish minimum requirements and should never be used for 
any legal purpose. The commenter stated that the information in the OOH 
should also not be used to determine if an applicant is qualified to 
enter a specific job in an occupation. A company similarly expressed 
their concern with the proposed changes and agency usage of

[[Page 103085]]

the OOH to determine if a position qualifies as a specialty occupation. 
The company reasoned that the OOH only provides a general description 
and is not intended to be used to define a specialty position. The 
company recommended a more flexible approach and also cited the OOH's 
statement that it should never be used for any legal purposes. A law 
firm suggested that the agency make it clear that the OOH is not the 
exclusive source of minimum education requirements and that expert 
opinions by professors in the field of study and by veterans in the 
particular occupation should be included as ``reliable and informative 
sources.''
    Response: There is no reference to the DOL's OOH in either the 
proposed or the final regulatory text. DHS referenced this resource in 
the preamble of the NPRM when discussing how it reviews the specialty 
occupation criteria, noting that it will continue its practice of 
consulting the OOH and other reliable and informative sources, such as 
information from the industry's professional association or licensing 
body, submitted by the petitioner. 88 FR 72870, 72877 (Oct. 23, 2023). 
The OOH is not determinative. Rather, it is an informative source, that 
may be used among others, to analyze a position's duties and whether a 
position qualifies as a specialty occupation.\56\
---------------------------------------------------------------------------

    \56\ See Royal Siam Corp., 484 F.3d at 146 (``In its review of 
petitions for nonimmigrant work visas, [US]CIS frequently--and 
sensibly--consults the occupational descriptions collected in the 
Handbook. Subject only to caveats at the outer fringes, the choice 
of what reference materials to consult is quintessentially within an 
agency's discretion . . . .'').
---------------------------------------------------------------------------

    Comment: A commenter expressed support for the addition of the 
``degree in a directly related specific specialty'' language in 8 CFR 
214.2(h)(4)(iii)(A)(3). The commenter reasoned that because H-1B visas 
are designed for individuals with specific specialty degrees, the 
requirement would ensure that H-1B visas are awarded to people who have 
chosen their degrees and studied for a specific occupation. The 
commenter further stated that USCIS should not be constrained in 
recognizing a position as a specialty occupation.
    Conversely, several commenters discussed general concerns with the 
``directly related specific specialty'' requirement in the specialty 
occupation criteria. A joint submission expressed opposition to the 
inclusion of a ``directly related'' requirement in the criteria for a 
``specialty occupation.'' The commenters stated that it opposed the 
language for the same reasons described in its comment on the 
``directly related'' requirement in the definition of ``specialty 
occupation.''
    Response: Similar to the definition of ``specialty occupation'' 
that uses the term ``directly related,'' the addition of the phrase 
about a ``degree in a directly related specific specialty'' within the 
criteria merely reinforces 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. In determining whether a position involves a specialty 
occupation, USCIS currently 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. The ``specific 
specialty'' requirement is only met if the degree in a specific 
specialty or specialties, or its equivalent, provides a body of highly 
specialized knowledge directly related to the duties and 
responsibilities of the particular position as required by INA 
214(i)(1)(A).
    Comment: A couple of joint submissions and an advocacy group said 
that the proposed requirement of a ``directly related specific 
specialty'' degree would exclude those with relevant experience and 
coursework, restricting the pool of qualified candidates employers 
could consider. A joint submission from industry associations urged 
codifying existing practices that allow demonstrating how a degree or 
coursework relates to a position, in order to maintain U.S. leadership 
in emerging technologies and promote effective H-1B usage.
    Response: Similar to the definition of ``specialty occupation'' 
that uses the term ``directly related,'' 8 CFR 214.2(h)(4)(iii)(A) 
should not hinder the ability of companies to consider employees with 
experience. USCIS analyzes whether the proffered position is a 
specialty occupation (including determining if there is a direct 
relationship between the required degree(s) and the duties of the 
position) separately from its analysis of a beneficiary's 
qualifications. When applicable, USCIS also will consider whether the 
beneficiary has the 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. 
See 8 CFR 214.2(h)(4)(iii)(C)(4), (h)(4)(iii)(D).
    Comment: A professional association stated that the proposed 
changes to the criteria requiring a ``degree in a directly related 
specific specialty'' would restrict eligibility for H-1B status in a 
manner that was inconsistent with both statute and Federal court 
precedent. Specifically, the commenter referenced Tapis Int'l v. INS, 
Residential Finance Corp. v. USCIS, and Raj & Co. v. USCIS, which it 
said held that ``the body of specialized knowledge acquired pursuant to 
the degree,'' and not the degree itself, qualifies an individual for a 
specialty occupation. The commenter stated that despite this precedent, 
the NPRM focuses exclusively on the degree title and not on the 
underlying body of knowledge. Citing Residential Finance, the commenter 
added that while there is no requirement that specialized studies be in 
a single academic discipline, the NPRM does not consider the 
``specialized course of study'' necessary to perform the job duties of 
a position and whether it could be obtained through degrees in a 
variety of fields. The commenter said that instead, the NPRM relies on 
Caremax Inc. v. Holder, which it said did not establish the complexity 
of the position or provide evidence of the beneficiary's qualifying 
body of specialized knowledge.
    Response: DHS disagrees that requiring a ``degree in a directly 
related specific specialty'' will restrict eligibility for H-1B 
beneficiaries or that this is inconsistent with the statute. This 
provision codifies existing USCIS practice that there must be a direct 
relationship between the required degree field(s) and the duties of the 
position. Further, this aligns with the statute, which states that 
attainment of a bachelor's or higher degree in the specific specialty 
(or its equivalent) is the minimum for entry into the occupation in the 
United States. See section 214(i)(1) of the INA, 8 U.S.C. 1184(i)(1).
    DHS also disagrees that this provision is contrary to case law. 
While the NPRM referred to degrees by their titles, it also explained 
that it was referring to the educational credentials 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 also will consider whether the beneficiary has 
the 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. See 8 CFR 
214.2(h)(4)(iii)(C)(4). It appears the commenter may have conflated the 
issue of a position's qualification as a specialty occupation with the 
issue of a

[[Page 103086]]

beneficiary's qualification for the specialty occupation. A 
beneficiary's credentials to perform a particular job are relevant only 
when the job is first found to qualify as a specialty occupation. USCIS 
is required to follow long-standing legal standards and determine 
first, whether the proffered position qualifies as a specialty 
occupation, and second, whether the beneficiary was qualified for the 
position at the time the nonimmigrant visa petition was filed.\57\ DHS 
referenced Caremax Inc. v. Holder in the NPRM because it discusses 
whether the position is a specialty occupation,\58\ rather than 
beneficiary qualifications.
---------------------------------------------------------------------------

    \57\ Cf. Matter of Michael Hertz Assocs., 19 I&N Dec. 558, 560 
(Comm'r 1988) (``The facts of a beneficiary's background only come 
at issue after it is found that the position in which the petitioner 
intends to employ him falls within [a specialty occupation]'').
    \58\ See Caremax Inc v. Holder, 40 F. Supp. 3d 1182, 1187-88 
(N.D. Cal. 2014) (explaining that 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).
---------------------------------------------------------------------------

    Comment: Several commenters discussed suggested revisions to the 
language of the ``directly related specific specialty'' requirement, 
with some recommending that USCIS remove it from proposed 8 CFR 
214.2(h)(4)(iii)(A)(1) through (4). A professional association 
suggested that the ``directly related specific specialty'' language be 
replaced throughout the criteria with ``a body of specialized knowledge 
obtained pursuant to a U.S. baccalaureate or higher degree in a 
specific specialty, or its equivalent.'' The commenter reasoned that 
the language would be consistent with statute, affirm the importance of 
specialized courses of study, and eliminate the need to rely on the 
OOH.
    Response: As previously stated, DHS is slightly revising its 
regulatory language in the definition of specialty occupation. The 
definition clarifies that a position may allow for a range of 
qualifying degree fields, provided that each of those fields is 
directly related to the duties of the position. The regulatory language 
also includes a definition of ``directly related.'' DHS believes the 
regulatory language as revised in this final rule more clearly reflects 
and codifies current practice. As a result, DHS does not anticipate 
this provision will have a negative impact on any particular 
occupations and declines to make the suggested revisions to the 
regulatory text.
    Comment: An advocacy group expressed their support for the need to 
amend the criteria for a specialty occupation but also provided 
recommended changes to the criteria. Specifically, the advocacy group 
suggested the inclusion of an acknowledgment of ``modern education 
which includes multidisciplinary majors and minors'' where the criteria 
reference a ``U.S. baccalaureate'' degree. The group also suggested 
recognition of the value of industry experience by including industry 
experience in the specialty occupation consideration.
    Response: DHS declines to make the suggested changes because the 
regulatory provisions as finalized sufficiently address the commenter's 
concerns. The criteria for determining whether a position qualifies as 
a specialty occupation allow for the equivalent of a U.S. baccalaureate 
or higher in a directly related specialty. The petitioner bears the 
burden to demonstrate equivalency. More importantly, it appears the 
commenter may be conflating beneficiary qualifications, enumerated at 8 
CFR 214.2(h)(4)(iii)(C), with the standards for specialty occupation 
positions, enumerated at 8 CFR 214.2(h)(4)(iii)(A). When assessing a 
beneficiary's qualifications, USCIS also will consider, as applicable, 
whether the beneficiary has the 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. 
See 8 CFR 214.2(h)(4)(iii)(C)(4), (h)(4)(iii)(D).
    Comment: A company highlighted the use of the word ``are'' and 
recommended changing it to ``is'' in 8 CFR 214.2(h)(4)(iii)(A)(4). The 
company also recommended changing the term ``United States industry'' 
to ``industry in the United States'' at 8 CFR 214.2(h)(4)(iii)(A)(2) 
for improved clarity.
    Response: DHS agrees that the word ``are'' should be ``is'' in 8 
CFR 214.2(h)(4)(iii)(A)(4), and will make this non-substantive revision 
in the final regulatory text. DHS also agrees that ``industry in the 
United States'' is clearer than ``United States industry'' and will 
make this non-substantive revision in the final regulatory text at 8 
CFR 214.2(h)(4)(iii)(A)(2). Additionally, DHS is revising 8 CFR 
214.2(h)(4)(iii)(A)(2) and (3) by adding ``to perform the job duties'' 
to qualify the requirements of the position and clarify that DHS looks 
not just at the title of the position, but at the position's duties.
    Comment: In the criteria at 8 CFR 214.2(h)(4)(iii)(A)(2), a legal 
services provider disagreed with the proposal to change the current 
wording ``in parallel positions at similar organizations'' to ``in 
parallel positions at similar organizations within the employer's 
industry in the United States.'' The commenter stated that this 
proposed change would narrow the focus more than is necessary or 
relevant. The commenter emphasized the importance of focusing on the 
specific duties of the position instead of the industry in which the 
petitioner operates, as this important distinction would make 
adjudications more efficient. The commenter cited an example where the 
agency determined that a small information technology company was not a 
``similar organization'' to a 1,000-employee information technology 
company through numerous RFEs, negatively impacting all parties.
    Response: DHS disagrees that the revisions to 8 CFR 
214.2(h)(4)(iii)(A)(2) will narrow or otherwise limit the focus of this 
criterion. The regulatory text of 8 CFR 214.2(h)(4)(iii)(A)(2) prior to 
this final rule has always focused on the employer's industry; that 
version of the regulatory text specifically stated, ``The degree 
requirement is common `to the industry' in parallel positions among 
similar organizations.'' The change to add a reference to the 
employer's industry in the United States is a non-substantive change 
and is not expected to increase RFEs and denials.
    Comment: A joint submission voiced specific concern about the 
inclusion of the word ``staffed'' in the third prong of the regulatory 
criterion, stating that, in the ``overwhelming majority'' of 
circumstances, where H-1B petitioning employers place their beneficiary 
employees at third party sites, they are--by the terms and definition 
of the proposed regulation itself--not staffing companies. The 
commenters said that they are instead corporate entities with which 
another entity has engaged for the delivery of professional/specialty 
occupation services. The commenters acknowledged that USCIS in the 
preamble expressed its intent to narrow the definition of ``staffed'' 
to apply only where a beneficiary employee would be employed at a 
third-party worksite ``to fill a position in the third party's 
organization'' but said that the wording of the proposed criterion does 
not sufficiently narrow the definition to achieve the professed intent.
    Response: DHS declines to strike the language at 8 CFR 
214.2(h)(4)(iii)(A)(3) relating to a beneficiary staffed to a third 
party. This language provides necessary guardrails to ensure that 
beneficiaries who provide staffing to a third party sufficiently meet 
the specialty occupation requirements. As clarified in

[[Page 103087]]

the NPRM, a beneficiary who is ``staffed'' to a third party becomes 
part of that third party's organizational hierarchy by filling a 
position in that hierarchy, even when the beneficiary technically 
remains an employee of the petitioner. 88 FR 72870, 72908 (Oct. 23, 
2023). By contrast, for example, a beneficiary would be providing 
services to a third-party where they were providing software 
development services to a third party as part of the petitioner's team 
of software developers on a discrete project, or employed by a large 
accounting firm providing accounting services to various third-party 
clients. In these examples, USCIS would generally not consider the 
beneficiary to be ``staffed'' to the third-party because the third-
party does not have employees within its organizational hierarchy 
performing those duties in the normal course of its business and does 
not have a regular, ongoing need for the work to be performed.
d. Equivalencies
    Comment: Several commenters suggested DHS consider 3 years of 
experience as equivalent to 1 year in college, stating that experience 
should be considered valuable for a job. Some of the commenters wrote 
that under the current definition of ``specialty occupation,'' 12 years 
of work experience in an occupation equates to a bachelor's degree in 
that occupation but expressed that the proposed rule is ambiguous as to 
whether this standard would still apply.
    Another commenter recommended ``a more flexible analysis'' to 
consider whether a noncitizen is qualified for a specialty occupation. 
A commenter said that the current 8 CFR 214.2(h)(4)(iii)(D)(5) is 
``overly restrictive'' in requiring 3 years of work experience to 
substitute for every 1 year of college-level training lacking. The 
commenter said a more flexible analysis would recognize the reality 
that some individuals, despite not possessing a degree in the specific 
specialty and not having 12 years of experience, may be able to perform 
a specialty occupation at the same level as someone who has the 
normally required a 4-year degree and would take into account the rigor 
of the noncitizen's past work experience.
    Response: DHS did not propose changing 8 CFR 214.2(h)(4)(iii)(D) or 
any other provisions with respect to how USCIS determines whether the 
beneficiary possesses the equivalent to the required degree and any 
suggestions to change this standard are beyond the scope of this rule. 
For purposes of determining equivalency to a baccalaureate degree in 
the specialty under 8 CFR 214.2(h)(4)(iii)(D), USCIS will continue to 
require 3 years of specialized training and/or work experience to be 
demonstrated for each year of college-level training the noncitizen 
lacks.
    Comment: A commenter suggested that USCIS allow individuals with a 
degree and 5 or more years of work experience to qualify for a 
specialty occupation, noting that many of these individuals face long 
waits for immigrant visas. Another commenter suggested that USCIS 
consider individuals that have 10 or more years of experience as a 
computer programmer or software engineer as eligible under the 
``specialty occupation'' definition. Other commenters suggested carve 
outs for individuals, such as allowing an individual with a master's 
degree in telecom networks to qualify for software engineering roles 
inside networking companies, or establishing a different definition of 
``specialty occupation'' for new H-1B petitions for individuals who 
have spent years working while waiting for an immigrant visa to become 
available.
    Response: DHS declines to create specific clauses or carve-outs 
(such as those with 5 or 10 years of experience or with a master's 
degree, or for individuals waiting for an immigrant visa to become 
available) for beneficiaries to qualify for a specialty occupation. As 
with current practice, USCIS will continue to make individualized 
determinations of whether a beneficiary is qualified to perform the 
specialty occupation offered by the employer.
    Comment: A commenter said that ``the proposed changes relative to 
the college degree requirement'' are important and that USCIS should 
explicitly describe the meaning and requirements of these provisions as 
it relates to foreign equivalent degrees.
    Response: 8 CFR 214.2(h)(4)(iii)(A), enumerating standards for a 
specialty occupation, adds ``U.S.'' to baccalaureate, which clarifies 
that a baccalaureate degree must be a U.S. degree or its foreign 
equivalent and that a foreign baccalaureate is not necessarily 
equivalent to a U.S. baccalaureate. Furthermore, existing 8 CFR 
214.2(h)(4)(iii)(C), enumerating beneficiary qualification criteria, 
indicates in part that the individual may ``[h]old a foreign degree 
determined to be equivalent to a United States baccalaureate or higher 
degree required by the specialty occupation from an accredited college 
or university.'' DHS believes these provisions sufficiently clarify 
that a position must require a U.S. baccalaureate or its equivalent, 
which may include a foreign degree that is equivalent to the required 
U.S. degree, and that a beneficiary may qualify based on possession of 
a foreign degree determined to be equivalent to a U.S. baccalaureate 
degree.
    Comment: A nonprofit legal organization suggested that DHS 
incorporate an ``objective threshold'' into the definition of a 
``specialty occupation'' that 75 percent of U.S. workers in that 
occupation must have a college degree. The commenter suggested that if 
an occupation did not meet this threshold, it should not be considered 
a specialty occupation.
    Response: DHS declines to add a threshold to the definition of a 
``specialty occupation'' that a certain percentage of U.S. workers in 
the occupation must have a college degree. There is no statutory 
requirement for such threshold. DHS also notes that the commenter did 
not provide supporting data or rationale to explain how it came to a 
75% threshold. Establishing a threshold of U.S. workers in an 
occupation with a college degree is not necessary to meet the statutory 
definition of ``specialty occupation.'' The regulatory provisions as 
finalized in this rule sufficiently outline requirements to meet the 
specialty occupation definition.
    Comment: A research organization suggested that DHS further 
strengthen the definition of ``specialty occupation'' by requiring that 
a noncitizen have at least a bachelor's degree that meets the statutory 
requirement from a single education institution, rather than having 
multiple, lesser degrees that USCIS might cumulatively consider to be 
equivalent to the required bachelor's degree. The commenter reasoned 
that this would conform more closely to the requirement in the statute 
and ensure that H-1B workers with qualifying levels of education are 
more likely to access the program, benefiting employers and the 
economy. Similarly, an advocacy group proposed that DHS include a 
provision in the final rule requiring a single source degree, as 
opposed to the current practice of allowing a combination of lesser 
degrees to qualify as ``equivalent to a U.S. bachelor's degree.''
    A commenter advocated requiring that H-1B beneficiaries earn 
degrees in the United States as a way to promote development at U.S. 
educational institutions and social integration of H-1B beneficiaries. 
Another commenter endorsed the idea that H-1B recipients should have 
obtained their degrees in the United States, which the commenter

[[Page 103088]]

said would incentivize international students to pursue their education 
within the United States, promoting growth for American educational 
institutions and facilitating integration into American society, as 
well as ``guarantee[ing]'' that the H-1B program benefits individuals 
who are well-acquainted with the American academic and professional 
environments.
    Response: DHS declines to require a single source degree, i.e., 
requiring that a beneficiary must possess a bachelor's degree from a 
single educational institution. DHS also declines to require a 
beneficiary to possess a degree obtained in the United States. The 
commenters have not explained how such requirements would be more 
consistent with the statute, given that INA sec. 214(i)(1), 8 U.S.C. 
1184(i)(1), expressly allows for a bachelor's or higher degree in the 
specific specialty ``or its equivalent,'' and INA sec. 214(i)(2), 8 
U.S.C. 1184(i)(2), expressly allows for ``experience in the specific 
specialty equivalent in the completion of such degree, and [] 
recognition of expertise in the specialty through progressively 
responsible positions relating to the specialty'' in lieu of completion 
of the degree described in INA sec. 214(i)(1), 8 U.S.C. 1184(i)(1).
e. Applicability of Proposed Changes to Specialty Occupation to 
Specific Industries or Fields
    Comment: Several commenters offered recommendations to further 
restrict specialty occupation requirements with respect to certain 
industries. For example, a commenter supported the proposed changes but 
said that ``specialty occupation'' needs to be stricter, particularly 
for technology occupations. An individual commenter said that software 
developer positions must require a graduate degree in computer science 
or computer applications/information systems. This commenter said that 
making education requirements stringent would make international 
students more attractive to the United States and provide them a 
greater opportunity to find employment. A couple of commenters 
requested that DHS exclude IT positions from the specialty occupation 
classification and Schedule A, with one commenter reasoning that it is 
challenging for U.S. citizens to obtain an IT job.
    Response: DHS declines to revise the provisions to make the 
specialty occupation criteria more restrictive in general. The purpose 
of the revisions to the definition and criteria of specialty occupation 
are to codify current practice and better align the regulatory 
definition with the statutory definition.
    DHS will not adopt the suggestions to require a graduate degree for 
certain IT positions. There is no statutory support for such a 
requirement, as the statutory definition of ``specialty occupation'' is 
based on a minimum requirement of ``a bachelor's or higher degree in 
the specific specialty (or its equivalent).'' Section 214(i) of the 
INA, 8 U.S.C. 1184(i). DHS will not adopt the suggestion to exclude IT 
positions from qualifying as specialty occupations as there is no 
statutory support for such a broad exclusion.
    Comment: A commenter recommended DHS consider providing ``dedicated 
resources for noncitizens specializing in AI and other strategic 
fields, such as a `concierge service' or fast-track process,'' in order 
to inform adjudicators about the particularities of AI jobs, employers, 
and degree programs and reduce processing delays.
    Response: DHS declines to create a ``concierge service'' or ``fast-
track process'' for noncitizens specializing in any given field. USCIS 
officers are trained to adjudicate petitions for all industries. 
Additionally, DHS believes it would be unfair to prioritize any 
specific field over others. Petitions for individuals in AI and other 
``strategic fields'' will continue to be processed through standard 
adjudication channels.
    Comment: Several commenters opposed the ``directly related'' 
language, citing negative impacts on start-ups and beneficiary-owners. 
For instance, an advocacy group expressed concern that the proposed 
language could impact startups because many startups exist in ``new and 
burgeoning fields'' that do not have ``directly related'' degrees. The 
commenter said that the proposed definition change would cause talent, 
research, and development activities to leave the United States. A 
joint submission expressed concern that the ``directly related'' 
requirement would require beneficiary-owners to prove that their 
``majority of the time'' duties are ``directly related'' to their 
specific specialties and that this change would lead to beneficiary-
owners encountering more RFEs and increasing the likelihood of denial 
for founders. Another joint submission expressed opposition to the 
codification of the ``directly related specific specialty'' requirement 
within the specialty occupation criteria, reasoning that beneficiary-
owners who have degrees in a technical field but whose role evolves 
into an executive role might not be able to qualify for specialty 
occupation visa categories under the new criterion. This joint 
submission said there might be a potential for disagreements among 
adjudicators over duties considered to be ``directly related'' to 
owning or directing a start-up and requested additional guidance be 
provided through regulation or the USCIS Policy Manual to facilitate 
consistent decision-making by adjudicators.
    Response: The changes to the specialty occupation definition are 
not intended to disadvantage start-ups and beneficiary-owners. DHS 
believes that specialty occupation provisions codified in this rule 
sufficiently accommodate start-ups and beneficiary-owners. DHS 
understands that, as in many positions, many beneficiary-owners and 
those in start-up companies may seek positions in new or emerging 
fields for which there may not be a singular degree requirement to meet 
the needs of the position. As stated in new 8 CFR 214.2(h)(4)(ii), a 
position may allow for a range of qualifying degree fields. The 
petitioner must demonstrate how each of those degree fields is directly 
related to the duties of the position. The petitioner is not required 
to show an ``exact correspondence'' between degree field(s) and the 
occupation; as finalized in this rule, ``directly related'' means there 
is a logical connection between the degree, or its equivalent, and the 
duties of the position.
    For beneficiary-owners, it is true that, while the beneficiary may 
perform duties directly related to owning and directing the 
petitioner's business, the beneficiary must perform specialty 
occupation duties authorized under the petition a majority of the time. 
See new 8 CFR 214.2(h)(4)(ii). The burden is on the petitioner to 
demonstrate that the qualifying degree field(s) is or are directly 
related to those specialty occupation duties of the position. Codifying 
this requirement affords petitioners with greater clarity on the 
documentation necessary to include with their petitions, thereby 
reducing the likelihood of RFEs. DHS believes the regulatory text as 
finalized accommodates start-ups and beneficiary-owners while aligning 
with the statutory requirements for a specialty occupation.
    Comment: A couple of commenters expressed the need to consider 
physicians in the specialty occupation requirements. For example, a 
professional association wrote that H-1B physicians deserve the 
specialty occupation designation, as they require education and 
training that ``far exceeds an undergraduate degree.'' The commenter 
cautioned USCIS to ensure that the ``directly related'' requirement is 
not interpreted in a way that would disadvantage physicians, who 
graduate with a general Doctor of Medicine (MD) or a Doctor of 
Osteopathic Medicine

[[Page 103089]]

(DO) degree and then specialize during their residency. The commenter 
added that physicians meet the education requirements of the proposed 
rule and the statutory ``highly specialized knowledge'' requirement, 
and as such, deserve the specialty occupation designation. 
Additionally, the association reasoned, that physicians undergo years 
of residency to expand their knowledge in a specialized area of 
medicine. The association cautioned the Department against construing 
``specialty occupation'' too narrowly in a way that would disqualify 
physicians, who are critical to filling U.S. workforce gaps. A joint 
submission, echoing the statements on the educational and experiential 
qualifications of physicians, recommended that DHS clarify in the final 
rule that the amended requirements do not disadvantage or change 
physicians' specialty occupation status.
    Response: DHS confirms that the regulatory text regarding ``a 
general degree'' does not refer to a Doctor of Medicine or a Doctor of 
Osteopathic Medicine and should not impact higher-level degrees. While 
specialty occupation determinations are made on a case-by-case basis, 
the regulatory text regarding ``a general degree'' generally applies to 
four-year bachelor-level degrees, because higher-level degrees require 
more specialization than those at a bachelor's level.
    Comment: A professional association urged the Department to accept 
as precedent that pilots are not a ``specialty occupation.'' The 
association expressed concern that U.S. air carriers have increasingly 
misused H-1B, E-3, and H-1B1 visas to fill pilot positions, raising 
concerns about wage distortion in the U.S. pilot labor market. Thus, 
the association said that adopting the interpretation that this 
profession does not qualify as a ``specialty occupation,'' would 
facilitate the consistent application of the standard across agencies, 
serve the Department's interests in fidelity to the statutory and 
regulatory standard, allow for fair program administration, and reduce 
administrative burdens from meritless petition filings. The 
professional association also urged DHS to limit the proposed specialty 
occupation regulations to petitions for new employment only, citing the 
``critical fairness and reliance interests'' that would be at stake for 
existing pilot visa holders, their employers, and crewmembers should 
DHS disrupt prior eligibility determinations. Specifically, the 
commenter suggested that the changes should not be used to revoke or 
reconsider the eligibility of existing H-1B, E-3, or H-1B1 pilot visa 
holders, or deny petitions or applications for existing pilot visa 
holders to continue their current employment, make changes to their 
previous employment with their current employer, obtain concurrent 
employment, or change employers. Conversely, a commenter suggested that 
the H-1B program should permit professional certifications outside of a 
bachelor's degree, including certifications for commercially rated 
pilots. The commenter reasoned that there are trained, experienced 
pilots in other countries who could address the U.S. shortage of 
commercially rated pilots in rural regions for charter and agricultural 
applications.
    Response: DHS declines to create separate criteria for particular 
industries or occupations, or to declare through this rulemaking that 
certain occupations are or are not specialty occupations. The revisions 
to the definition and criteria for specialty occupations are not 
intended to disadvantage or advantage any particular groups.
f. Other Comments on Specialty Occupation
    Comment: A commenter said it was unclear how the changes to the 
specialty occupation definition would add protections for U.S. workers, 
as employers demonstrate there are no U.S. workers with relevant skills 
in the LCA.
    Response: DHS did not state that changing the definition of 
specialty occupation would add protections for U.S. workers, but DHS 
believes that better aligning the regulatory definition and standards 
for a ``specialty occupation'' with the statutory definition will 
improve program integrity by providing added clarity on which positions 
meet eligibility requirements. DHS also highlights that matters of H-1B 
program integrity are directly addressed and enhanced by other 
provisions of this rule, including provisions on the bona fide job 
offer requirement, non-speculative employment, and site visits. 
Furthermore, DHS notes, while deferring to Department of Labor (DOL) 
authority, that the LCA process generally does not include a showing 
that there are no qualified U.S. workers for the position. Nor does the 
LCA process serve as a guardrail to ensuring that a position qualifies 
as a specialty occupation and is not determinative of such 
qualification.\59\
---------------------------------------------------------------------------

    \59\ See, e.g., Xpress Grp., Inc. v. Cuccinelli, 2022 WL 433482, 
at *5 (W.D.N.C. Feb. 10, 2022) (``DOL certification of a LCA is not 
determinative as to whether the position is in fact a `specialty 
occupation.' Rather, the specialty occupation determination is made 
by USCIS in accordance with section 214(i)(1) of the INA. . . .'' 
(citation omitted)).
---------------------------------------------------------------------------

    Comment: A joint submission suggested adding ``a comparable 
evidence criterion'' (similar to the concept for EB-1 outstanding 
researchers) so that, if none of the listed regulatory criteria clearly 
apply to the evidence the petitioner intends to submit, the petitioner 
could submit comparable evidence to establish that the offered job is a 
specialty occupation. The commenter stated that that this alternative 
would allow petitioners to submit alternate, but qualitatively 
comparable, evidence where evidence does not fit neatly into the 
enumerated list. The commenters emphasized the importance of this 
recommendation by highlighting the proposed change in 8 CFR 
214.2(h)(4)(iii)(A)(3), where petitioners are limited to showing 
evidence of an established recruiting or hiring practice. Similarly, an 
advocacy group expressed their support for the need to amend the 
criteria for a specialty occupation to give due consideration to 
research or publications.
    Response: As part of qualifying as a specialty occupation, the 
position must meet one of the criteria enumerated at 8 CFR 
214.2(h)(4)(iii)(A)(1) through (4). DHS declines to add regulatory 
language stating that the petitioner may submit ``comparable evidence'' 
to establish that a position qualifies as a specialty occupation in 
lieu of meeting one of the criteria, and also declines to amend the 
criteria to consider research or publications. Meeting one of the 
enumerated criteria is necessary to ensure the position satisfies the 
definition of a specialty occupation.\60\ Additionally, DHS notes that 
a beneficiary's research or publications are likely applicable in 
determining beneficiary qualifications to perform the occupation, 
rather than determining whether a position qualifies as a specialty 
occupation. Petitioners may submit any evidence to demonstrate that the 
position satisfies one of the criteria at 8 CFR 214.2(h)(4)(iii)(A)(1) 
through (4). As noted by a commenter, and as acknowledged in the NPRM, 
petitioners might not be able to demonstrate eligibility under 8 CFR 
214.2(h)(4)(iii)(A)(3) when seeking to fill a position for the first 
time. However, as stated in the NPRM, first-time hirings are not 
precluded from qualifying under one of the other criteria listed at 8 
CFR 214.2(h)(4)(iii)(A). DHS believes the criteria finalized in this 
rule, in

[[Page 103090]]

conjunction with the revised definition of specialty occupation, afford 
petitioners sufficient flexibility while adhering to statutory 
requirements.
---------------------------------------------------------------------------

    \60\ While meeting one of the criteria stated in 8 CFR 
214.2(h)(4)(iii)(A) is necessary, it is not necessarily sufficient 
to meet the statutory and regulatory definition of specialty 
occupation.
---------------------------------------------------------------------------

3. Amended Petitions
    Comment: Several commenters, including a trade association and a 
company, expressed support for DHS's clarification related to amended 
petitions. The trade association said that it would enhance processing 
efficiency and an individual commenter said it would reduce 
administrative uncertainties and complexities. The company said that 
stakeholders would benefit from the clarity provided by codifying and 
consolidating several sources of guidance and practices, and that the 
simplification would alleviate administrative burdens by reducing the 
frequency of RFEs and NOIDs.
    Response: DHS agrees that codifying and consolidating requirements 
on when an amended or new H-1B petition must be filed due to a change 
in an H-1B worker's place of employment will offer clarity and reduce 
uncertainty. Existing requirements on the need to file an amended or 
new H-1B petition due to a change in work location appear in various 
sources, including DHS regulations, a precedent decision interpreting 
the existing DHS regulation, USCIS policy guidance, DOL regulations, 
and DOL guidance. DHS agrees that codifying and consolidating existing 
requirements for amended or new petitions will better serve petitioners 
in complying with these requirements. DHS also agrees that the clear 
standard reflected in this provision may mitigate the need for RFEs and 
NOIDs, particularly on H-1B petitions filed subsequent to the change in 
work location. DHS agrees that providing a clear, codified standard 
will further alleviate administrative burdens for employers when 
contemplating a new work location that may impact H-1B eligibility.
    Comment: A few commenters, including trade associations and a joint 
submission, expressed opposition to requiring an amended or new 
petition when a worker's place of employment is changed. The commenters 
elaborated that it would add an unnecessary burden for both the 
petitioner and USCIS, thus impeding the goals of increasing efficiency, 
filling labor shortages, and creating opportunities for innovation and 
expansion of the economy.
    Response: This rule does not create new filing requirements for 
petitioners. New 8 CFR 214.2(h)(2)(i)(E)(2) codifies current USCIS 
practice as articulated in its policy memorandum ``USCIS Final Guidance 
on when to File an Amended or New H-1B Petition After Matter of Simeio 
Solutions, LLC,'' which implemented a precedent decision, Matter of 
Simeio Solutions, LLC, 26 I&N Dec. 542 (AAO 2015).\61\ DHS generally 
recognizes the additional procedures and cost incurred by employers in 
filing amended petitions. However, these are existing requirements, and 
DHS is not increasing petitioners' filing burdens through this 
provision. Providing clearer regulations on when a new work location 
requires the filing of an amended H-1B petition, in line with existing 
requirements, reduces uncertainty on whether the ``material change'' 
threshold requiring an amended filing has been met. With this clearer 
standard, employers can better plan accordingly to ensure they and 
their employees remain in compliance, thereby potentially preventing 
further administrative burdens.
---------------------------------------------------------------------------

    \61\ The D.C. Circuit Court of Appeals rejected a challenge to 
the lawfulness of Matter of Simeio Solutions in ITServ All., Inc. v. 
DHS, 71 F.4th 1028 (D.C. Cir. 2023).
---------------------------------------------------------------------------

    Comment: A few trade associations and a business association 
recommended clarifying that a change in geographic worksite or end-
client does not constitute a ``material change'' that necessitates an 
amended petition. Another trade association stated that the regulatory 
definition of a ``material change'' should be limited to the matters 
delegated to DHS by Congress in the INA. According to the commenter, 
such delegated powers limit the definition of a ``material change'' to 
the factors in section 1184(i), which do not include the term ``area of 
employment.'' The trade association also indicated that DHS has a 
different view of the meaning of ``area of employment'' from that of 
DOL.
    Response: DHS disagrees with the comment that a change in 
geographic location requiring a new LCA does not constitute a 
``material change.'' As noted in the NPRM and as held in Matter of 
Simeio Solutions, a change in the place of employment of a beneficiary 
to a geographical area requiring a corresponding LCA may affect 
eligibility for H-1B status, and is therefore a material change for 
purposes of 8 CFR 214.2(h)(2)(i)(E) and (h)(11)(i)(A). For example, the 
geographic location of employment may impact the prevailing wage for 
the occupational classification, as the new employment location may be 
in a Metropolitan Statistical Area (MSA) with higher wage requirements. 
Per DOL regulations at 20 CFR 655.731, an employer seeking to employ an 
H-1B worker in a specialty occupation must attest on the LCA that it 
will pay the H-1B worker the higher of either the prevailing wage for 
the occupational classification or the actual wage paid by the employer 
to similarly situated employees in the geographic area of intended 
employment. H-1B petitions for a specialty occupation worker must 
include a certified LCA from DOL, and failure to comply with DOL's LCA 
requirements may impact eligibility for H-1B status.
    DHS also disagrees with the assertion that a material change should 
be limited to the factors delineated in section 214(i) of the INA, 8 
U.S.C. 1184(i). 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. Notably, 
section 103(a) of the INA, 8 U.S.C. 1103(a), authorizes the Secretary 
to administer and enforce the immigration and nationality laws and 
delegates to the Secretary the authority to establish such regulations 
as the Secretary deems necessary for carrying out these duties. Section 
101(a)(15)(H)(i)(b) of the INA, 8 U.S.C. 1101(a)(15)(H)(i)(b), 
establishes the H-1B nonimmigrant classification, section 214(a)(1) of 
the INA, 8 U.S.C. 1184(a)(1), authorizes the Secretary to prescribe, by 
regulation, the time and conditions of the admission of nonimmigrants, 
and section 214(c) of the INA, 8 U.S.C. 1184(c), authorizes the 
Secretary to prescribe how an importing employer may petition for H-1B 
nonimmigrant workers and the information that an importing employer 
must provide in the petition. Section 214(i) of the INA, 8 U.S.C. 
1184(i), however, merely sets forth the definition and requirements of 
a ``specialty occupation.'' Meeting the statutory definition and 
requirements of a specialty occupation is only one component of 
establishing H-1B eligibility. Limiting the definition of material 
change to factors in section 1184(i) of the INA would significantly 
hinder USCIS' ability to administer and enforce the INA, including 
adherence to the terms of an approved H-1B petition.\62\
---------------------------------------------------------------------------

    \62\ See ITServe All., Inc. v. DHS, 71 F.4th 1028, 1037 (D.C. 
Cir. 2023) (``[P]olicing compliance with the terms of an LCA plainly 
constitutes `administration and enforcement' of the INA, which 
section 1103(a)(1) independently authorizes.'').
---------------------------------------------------------------------------

    DHS further disagrees with the claim that DHS's view does not align 
with DOL's definition of ``area of intended employment.'' DHS directly 
cited DOL's definition of ``area of intended employment'' in the NPRM. 
88 FR

[[Page 103091]]

72870, 72878 n.40 (Oct. 23, 2023). DOL regulations govern the 
determination of whether a new work location is in a different area of 
intended employment as that included on the LCA. DHS is not deviating 
from DOL's definition or creating a new definition of this term. Under 
new 8 CFR 214.2(h)(2)(i)(E)(2), USCIS will require the petitioner to 
submit an amended or new H-1B petition if a new work location requires 
a new LCA, as determined by DOL's definition of ``area of intended 
employment.''
    Comment: A few commenters recommended alternative procedures for 
notifying USCIS of a change to an H-1B worker's job location. A trade 
association recommended that USCIS obtain a copy of the LCA from the 
Department of Labor, or in the alternative, implement a mechanism for 
notification of a change of employment location similar to Form AR-11, 
Alien's Change of Address Card, without requiring petitioners file a 
formal amended petition. One commenter, while expressing opposition to 
this provision, suggested that if USCIS will require an amended 
petition in the case of a new work location requiring a new LCA, it 
should only require submission of Form I-129 with limited evidentiary 
requirements. This commenter further suggested there should be 
presumptive and automatic approval of the location change and that 
USCIS issue an RFE if questions on H-1B eligibility arise. While 
discussing situations in which there is no material change in job 
duties and requirements after a job location change, a joint submission 
proposed that USCIS defer to the prior adjudicator's finding that the 
specialty occupation requirements were satisfied, thereby presuming 
continued eligibility for H-1B status. The submission proposed that, in 
these scenarios, a petitioning employer would provide advance 
notification to USCIS of a new work location via a ``new, simplified 
online form'' and would include proof of a newly certified LCA and 
certain attestations related to the employment. Upon filing of this 
form with USCIS, the employee could begin working at the new location, 
``consistent with H-1B portability provisions.'' Under this proposal, 
USCIS would review the form to determine whether the LCA properly 
corresponds with the new location, the wage requirements would be 
satisfied, and the job duties remain the same, and an adjudicator could 
issue a RFE or NOID if questions of continuing H-1B eligibility arise. 
If the petitioner would be deemed by USCIS to have satisfied these 
requirements, the beneficiary would be considered to have maintained 
nonimmigrant status and continue to be employed with authorization. If 
the request is denied, then USCIS would require a new Form I-129, with 
fees, to be filed within the 60-day grace period.
    Response: DHS declines to adopt these recommendations at this time. 
DHS did not propose in the NPRM to adopt new procedures or methods of 
evidence submission to notify USCIS of material changes to the 
conditions of H-1B employment. As previously established and discussed 
in the NPRM, a change in work location requiring a new LCA is a 
material change potentially impacting H-1B eligibility, and therefore 
requires petitioners file an amended or new petition, with all 
evidentiary requirements, under 8 CFR 214.2(h)(2)(i)(E). Submission of 
a complete petition allows USCIS adjudicators to conduct a thorough 
review of the material change to ensure continued eligibility for H-1B 
status.
    Comment: A professional association urged DHS to make an additional 
exception at 8 CFR 214.2(h)(2)(i)(E)(2), where the source of the 
prevailing wage in the initial labor certification is a collective 
bargaining agreement governed by the Railway Labor Act, which sets wage 
rates nationwide.
    Response: DHS recognizes the unique employment circumstances of 
workers under collective bargaining agreements. However, DHS declines 
to create an exception for positions where the source of the prevailing 
wage is a collective bargaining agreement. If a change in employment 
location requires a new LCA per DOL standards, then, under 8 CFR 
214.2(h)(2)(i)(E), the employer will also be required to submit a new 
or amended H-1B petition to USCIS.
    Comment: A trade association recommended amending the regulation so 
that ``a minor reduction in hours'' does not require a new filing.
    Response: DHS declines to amend the regulations to allow for a 
certain reduction in hours that would not rise to the level of a 
material change. The NPRM did not propose to provide such an amendment. 
While the commenter did not define what it considers as a ``minor 
reduction,'' the regulated public should have an opportunity to comment 
on any such framework.
    Comment: Some commenters suggested modification to the required 
timeframe for employers submitting amended petitions to reflect a new 
place of employment. A trade association, noting the unpredictable 
nature of job changes and the rapid response required to ensure that 
qualified employees are present where needed, suggested USCIS create a 
grace period for employers to file amended petitions following a 
``sudden or urgent change in a beneficiary's role,'' coupled with 
requiring evidence of increased pay in the interim if the material 
change results in a higher required wage. A university recommended 
revising the requirement that petitions must be filed before the change 
takes effect while leaving in place the ``post-Simeio'' guidance on 
changes in employment location, adding specific language allowing for a 
grace period after a material change takes place, or allowing for 
adjudicatory discretion on the level of material change involved with a 
location change. They commented that requiring an amended petition be 
filed before the material change takes effect contradicts 8 CFR 
214.2(h)(11)(i)(A), which requires that a petitioner ``immediately 
notify'' USCIS of changes in the terms and conditions of employment 
which may affect eligibility for H-1B classification. They stated that 
the requirement to provide immediate notification is more reasonable 
than the requirement to file an amended petition before a change takes 
effect.
    Response: DHS declines to provide a grace period for petitioners to 
file new or amended H-1B petitions reflecting material changes after 
they occur. Requiring amended petitions be filed before material 
changes occur is consistent with statutory and regulatory requirements 
that beneficiaries maintain status by only working in accordance with 
their approved petition. See, e.g., 8 CFR 214.2(h)(2)(i)(H) (describing 
the requirements to qualify for H-1B portability, to include not 
previously working without authorization); 8 CFR 274a.12(b)(9) (stating 
that an H-1B nonimmigrant may only be employed by the employer through 
whom the status was obtained, unless authorized to work based on a 
pending petition based on H-1B portability). As explained in existing 
USCIS policy, petitioners are already required to notify USCIS of 
material changes before they occur. USCIS articulated this policy in 
its policy memorandum ``USCIS Final Guidance on When to File an Amended 
or New H-1B Petition After Matter of Simeio Solutions, LLC,'' which 
discusses the ``USCIS position that H-1B petitioners are required to 
file an amended or new petition before placing an H-1B employee at a 
new place of employment not covered by an existing, approved H-1B 
petition.'' \63\ Working in

[[Page 103092]]

a manner or location not previously authorized before submission of a 
new or amended petition may constitute a violation of status.
---------------------------------------------------------------------------

    \63\ See USCIS, Policy Memorandum, PM-602-0120 USCIS Final 
Guidance on When to File an Amended or New H-1B Petition After 
Matter of Simeio Solutions, LLC (July 21, 2015), available at 
https://www.uscis.gov/sites/default/files/document/memos/2015-0721_Simeio_Solutions_Transition_Guidance_Memo_Format_7_21_15.pdf.
---------------------------------------------------------------------------

    DHS disagrees with the comment that this requirement is 
inconsistent with 8 CFR 214.2(h)(11)(i)(A), under which a petitioner 
must ``immediately notify'' USCIS of changes which may affect H-1B 
eligibility. Rather, new 8 CFR 214.2(h)(2)(i)(E)(2) adds needed 
specificity to this requirement, which may otherwise be unclear as to 
what ``immediately'' means. Further, 8 CFR 214.2(h)(11)(i)(A) is a 
broader provision that applies to situations other than when an amended 
or new petition must be filed, such as when the petitioner no longer 
employs the beneficiary. Thus, new 8 CFR 214.2(h)(2)(i)(E)(2) adds 
specificity in the narrower context of where there is a material change 
requiring an amended or new petition.
    Comment: A legal services provider recommended clarifying that 
workers may continue to work after the filing, and they do not have to 
wait for approval to take effect. The commenter recommended the 
following regulatory language: ``The beneficiary may begin working 
under the materially changed terms and conditions of employment upon 
the filing of the amended or new petition, assuming all other 
requirements and terms of eligibility are met.''
    Response: DHS declines to edit the proposed regulatory text as 
suggested by this commenter. However, DHS reiterates that if the 
beneficiary is eligible for H-1B portability pursuant to 8 CFR 
214.2(h)(2)(i)(H), the beneficiary would not need to wait for a final 
decision on the amended or new petition to begin working at the new 
place of employment. Such change may occur upon the filing of an 
amended or new petition with USCIS. Under H-1B portability, if an 
employer is filing an amended petition for the same employee and that 
employee meets the definition of an ``eligible H-1B nonimmigrant'' 
under 8 CFR 214.2(h)(2)(i)(H)(1), then the eligible H-1B nonimmigrant 
is authorized to work for that same employer in the new employment 
until the petition is adjudicated. This approach aligns with and 
codifies current USCIS practice, as clarified in USCIS policy 
memorandum ``USCIS Final Guidance on When to File an Amended or New H-
1B Petition After Matter of Simeio Solutions, LLC.'' \64\
---------------------------------------------------------------------------

    \64\ See USCIS, Policy Memorandum, PM-602-0120 USCIS Final 
Guidance on When to File an Amended or New H-1B Petition After 
Matter of Simeio Solutions, LLC (July, 21, 2015), available at 
https://www.uscis.gov/sites/default/files/document/memos/2015-0721_Simeio_Solutions_Transition_Guidance_Memo_Format_7_21_15.pdf.
---------------------------------------------------------------------------

    Comment: A university proposed that USCIS address that hybrid work 
arrangements are included in the definition of peripatetic work or are 
otherwise excluded from the definition of ``worksite.'' According to 
the commenter, this would alleviate some privacy concerns associated 
with disclosing the address and compensation in the LCA notice of 
filing, assuming the remote work location is within normal commuting 
distance to the employer's office. Similarly, a form letter campaign 
recommended clarifying ``that a beneficiary's change of residential 
address that is unrelated to any business decision of the employer is 
not ``a new job location'' and would not trigger the requirement to 
file an amended petition.'' An individual commenter reasoned that a 
hybrid employee's personal decision to change locations is factually 
different from the situation in Matter of Simeio Solutions and should 
be recognized by USCIS as such.
    Response: DHS acknowledges the concerns expressed by commenters 
related to remote and hybrid workers. However, DHS is not deviating 
from or expanding beyond DOL regulations through this rule. As noted in 
the NPRM, 20 CFR 655.715 includes definitions and examples of ``place 
of employment'' and ``worksite'' or ``non-worksite.'' 88 FR 72870, 
72879 (Oct. 23, 2023). If an employee's home residence constitutes a 
worksite under DOL definitions, employer obligations related to the LCA 
apply. For example, if a beneficiary's home is their worksite as 
determined under DOL regulations, and they move to a new residential 
address in a different area of intended employment with higher wage 
obligations, whether at the employee's choice or that of the employer, 
the employer is obligated to meet those higher wage obligations. This 
move would constitute a material change requiring a new LCA and 
submission of an amended or new H-1B petition. DHS declines to 
promulgate a provision under which a beneficiary's remote work location 
is categorically excluded from the definition of a worksite, 
potentially conflicting with DOL regulations.
    Comment: Some commenters suggested modifications related to 
proposed short-term placement provisions, under which H-1B workers may 
be placed at a worksite not listed on the approved petition or 
corresponding LCA for up to 30 or 60 days if certain conditions are 
met, without requiring an amended H-1B petition. At proposed 8 CFR 
214.2(h)(2)(i)(E)(2)(ii) and (iii), a healthcare provider urged DHS to 
clarify and define the terms ``substantial'' and ``employee 
development'' so organizations can ensure compliance with the rule. A 
professional association and a joint submission urged DHS to allow 
temporary, short-term placements for physicians beyond 30 or 60 days, 
thereby allowing physicians to provide care during public health 
emergencies such as natural disasters.
    Response: DHS declines to adopt these suggestions. As stated in the 
NPRM, new 8 CFR 214.2(h)(2)(i)(E)(2) does not codify all relevant 
considerations related to when to file an amended petition, and 
stakeholders should still consult DOL regulations and policy when 
considering if a new LCA is required. 88 FR 72870, 72879 (Oct. 23, 
2023). New 8 CFR 214.2(h)(2)(i)(E)(2) is consistent with DOL 
regulations at 20 CFR 655.735, under which short-term placements of 
less than 30 days, or in some cases 60 days, do not require a new LCA 
or an amended or new petition, provided there are no material changes. 
Regarding the request to clarify and define specific terms, DHS also 
reiterates that existing DOL regulations set forth criteria and 
guidance in connection with short-term placements. For example, as 
noted in the NPRM, 20 CFR 655.715 defines what would constitute an 
``employee developmental activity'' and what would constitute a ``place 
of employment'' or ``worksite'' for purposes of requiring a new LCA. 88 
FR 72870, 72879 (Oct. 23, 2023). As an additional example, 20 CFR 
655.735(e) clarifies when it may be inappropriate to use the short-term 
placement provisions in lieu of filing a new LCA, and also clarifies 
when these provisions may offer flexibility in assignments to afford 
enough time to obtain an approved LCA for an area where an employer 
intends for H-1B nonimmigrants to have a continuing presence. In 
proposing new 8 CFR 214.2(h)(2)(i)(E)(2), DHS did not purport to expand 
or further define short-term placement requirements as they exist in 
DOL regulations. Rather, this rule confirms that changes in work 
locations that meet DOL definitions of short-term placement do not on 
their own require

[[Page 103093]]

an amended or new H-1B petition be filed with USCIS.
4. Deference
    Comment: A couple of commenters expressed opposition to the 
proposal to codify USCIS' existing deference policy. An advocacy group 
expressed concern that codifying deference to prior petition approvals 
would allow USCIS adjudicators to ``cut corners'' and appease employers 
by approving petitions faster. The group cited remarks from a 2017 
USCIS Policy Memorandum, which rescinded the deference policy on the 
basis that continued scrutiny of H-1B petitions was warranted, as the 
burden of proof in establishing eligibility lies with the employer, not 
the government. The advocacy group echoed USCIS' previous position that 
deference was impractical and costly to implement, and the agency's 
authority should not be constrained by prior approvals but, rather, 
based on the merits of each case.
    A research organization similarly voiced concern that the 
codification of deference would constrain USCIS officers' fact-finding 
authority. The organization said that, under the proposed regulations, 
an officer would either have to assume no material error, change, or 
new information, or ``merely take an applicant or petitioner's word.'' 
The organization wrote that this ``leap of faith'' would be unnecessary 
and constitute ``a reckless abdication of authority.'' Furthermore, 
while citing Matter of Church Scientology International, 19 I&N Dec. 
593, 597 (Comm'r 1988), the organization said that adjudicators are not 
bound to approve subsequent petitions where eligibility has not been 
demonstrated, merely because of a prior, potentially erroneous, 
approval. The organization also concurred with USCIS' concern expressed 
in a 2017 policy memorandum \65\ that the deference policy would shift 
the burden of proof for establishing eligibility from the petitioner to 
the government. Therefore, the organization urged DHS to rescind the 
NPRM's proposed deference codification and the corresponding 2021 USCIS 
Policy Manual update and require USCIS officers to confirm all material 
facts before granting any request filed on Form I-129. The organization 
reasoned that such an approach would serve as a fraud detection 
mechanism and deterrent, and officers should not be constrained in 
requesting additional evidence in the adjudication process, consistent 
with existing USCIS policy.
---------------------------------------------------------------------------

    \65\ See USCIS, ``Rescission of Guidance Regarding Deference to 
Prior Determinations of Eligibility in the Adjudication of Petitions 
for Extension of Nonimmigrant Status,'' PM-602-0151 (Oct. 23, 2017).
---------------------------------------------------------------------------

    Response: DHS disagrees with these commenters. Deference to prior 
approvals involving the same parties and the same underlying facts does 
not equate to a lack of USCIS review of the petition. Petitioners 
continue to have the burden to present all required and relevant 
evidence to USCIS and to establish eligibility for the requested 
classification. DHS, however, agrees with the commenters that officers 
are not bound to approve subsequent petitions or applications seeking 
immigration benefits where eligibility has not been demonstrated 
strictly because of a prior approval, and USCIS decides each matter 
according to the evidence of record on a case-by-case basis.\66\ USCIS 
will give close consideration before deviating from a prior approval 
involving the same parties and the same underlying facts. In exercising 
deference, adjudicators will not defer to prior approvals if: there was 
a material error involved with the prior approval; there has been a 
material change in circumstances or eligibility requirements; or there 
is new, material information that adversely impacts the petitioner's, 
applicant's, or beneficiary's eligibility. See new 8 CFR 214.1(c)(5). 
If USCIS discovers that the petitioner or beneficiary engaged in fraud 
or willful misrepresentation of a material fact, the petition would not 
receive deference as that is new material information that adversely 
impacts the petitioner's, applicant's, or beneficiary's eligibility.
---------------------------------------------------------------------------

    \66\ Matter of Church Scientology Int'l, 19 I&N Dec. 593, 597 
(Comm'r 1988).
---------------------------------------------------------------------------

    DHS further disagrees that the deference policy is costly and 
impractical. Since the rescission of the deference policy in 2017, 
which some commenters suggested DHS reinstate, technological 
advancements--such as electronic filing and enhancements to the USCIS 
Electronic Immigration System (ELIS)--have improved ease of access to 
case records such that the pulling and reviewing of prior petitions is 
not an added burden in exercising deference. Additionally, commenters 
should note that through this rule, DHS is removing the sentence: 
``Supporting evidence is not required unless requested by the 
director'' from 8 CFR 214.2(h)(14) and from 8 CFR 214.2(o)(11) and 
(p)(13). Petitioners have the burden to present required evidence with 
each filing, even with deference in place. As such, DHS does not agree 
that deference is a costly and impractical policy.
    Comment: Numerous commenters expressed support for DHS's 
codification and clarification of its existing deference policy on 
prior determinations. A couple of commenters stated general approval of 
the codification of USCIS' deference policy. Other commenters supported 
deference to a prior decision when the underlying facts of a filing are 
unchanged and regarded this as a ``smart,'' ``sensible,'' and ``common-
sense'' approach.
    Many commenters regarded the codification of the deference policy 
as a positive development for upholding predictability, reliable and 
fair outcomes, consistent adjudications, and efficiency. For example, a 
joint submission concurred with DHS's statement that deference has 
``helped promote consistency and efficiency for both USCIS and its 
stakeholders,'' while an advocacy group said that deference reduces the 
Department's workload and ensures consistent and fair adjudications. A 
few companies welcomed the codification of USCIS' deference policy, 
reasoning that it would bring stability and ``peace of mind'' to 
employers and employees. One of the companies added that deference 
promotes consistency and efficiency for both the agency and 
petitioners, while another company reasoned that ``predictability of 
outcomes is a fundamental aspect of the rule of law.'' Another company 
supported the codification on the basis that this measure, in concert 
with other proposed provisions, would improve the availability of H-1B 
visas, support innovative companies, provide greater certainty, and 
reduce burdens in the visa process.
    A joint submission added that the proposed language would add 
clarity regarding the application of deference for petitioners, legal 
services providers, and adjudicators, which may be relied upon for 
personal and business planning purposes. A trade association 
additionally reasoned that codifying the deference policy would provide 
certainty to employers and reduce the need for extensive RFEs. 
Moreover, in addition to providing predictability and ameliorating 
inconsistencies in adjudications, a form letter campaign said that the 
codification of deference would close the officer training gap that 
further exacerbates disparities between decisions. Echoing the above 
remarks, a company regarded the proposed codification of the existing 
deference policy as a ``key lever of efficiency'' as USCIS focuses on 
sustaining operational effectiveness, achieving reasonable processing 
times, and upholding the

[[Page 103094]]

integrity of U.S. immigration programs amid resource constraints. The 
company reasoned that USCIS should not expend adjudicatory resources to 
conduct a full de novo review of the same underlying facts and 
circumstances for eligibility. Furthermore, the company agreed that the 
application of deference would allow for predictable, consistent, and 
faster determinations ``without compromising the level of scrutiny 
needed for substantive assessment.''
    A few commenters remarked on the benefits of USCIS' proposed 
deference codification for specific employment sectors. For example, an 
association remarked that the policy would reduce the administrative 
burden for higher education institutions in the USCIS filing process. A 
trade association remarked that the clarification around deference 
would streamline processing, reduce backlog stress, and improve the 
``well-being of the scientific workforce.''
    Many commenters acknowledged that the proposed rule would codify 
longstanding USCIS policy, which was reinstated in 2021 through USCIS 
Policy Manual guidance. For example, a form letter campaign supported 
the codification, reasoning that the deference policy has essentially 
been ``in effect since 2004.'' An advocacy group said that the 2021 
Policy Manual guidance, which instructed USCIS officers to defer to 
prior determinations when adjudicating extension requests unless there 
was a material error, change, or new circumstance, reversed 2017 policy 
rescinding deference and resulted in more work and extension denials 
for experienced technology employees. Citing a 2020 AILA Policy Brief, 
another advocacy group said that the 2017 rescission of the deference 
policy illustrated the benefits of this policy, as the rescission led 
to increased delays and backlogs, administrative burdens for employers, 
and no clear improvement to the integrity or efficiency of the H-1B 
program. A couple of trade associations and a business association 
similarly commended DHS for codifying the deference policy given the 
negative outcomes associated with its absence in the past, including 
``significant business disruptions'' to companies and impacts to 
companies, employees, and families following the 2017 rescission. The 
business association cited these challenges as justification for 
bolstering the longstanding deference policy through regulation. An 
association wrote that the codification of deference aligns with the 
agency's policy before its rescission in 2017. The association cited 
its comments on a 2021 Notice (86 FR 20398, Apr. 19, 2021) in which it 
commended USCIS for reinstating the longstanding policy of deferring to 
prior approvals when no error or material change in fact has occurred.
    In light of the above, commenters encouraged DHS to proceed with 
formalizing or codifying the existing deference policy in regulations.
    Response: DHS agrees that codification of the deference policy will 
help ensure consistent and efficient adjudications and provide greater 
predictability to the visa petition process without, as noted by one 
commenter, compromising the level of scrutiny needed for substantive 
assessment. This provision may also reduce the need for RFEs, saving 
time for both USCIS and stakeholders. DHS recognizes that certain 
commenters find this provision beneficial for their specific employment 
sectors. New 8 CFR 214.1(c)(5) brings agency regulations in line with 
longstanding deference policy, as implemented in a 2004 memorandum, 
rescinded in 2017, and reinstated in 2021 in the USCIS Policy Manual. 
DHS agrees with the noted benefits of codifying this longstanding 
policy.
    Comment: A few commenters, including a form letter campaign, 
expressly supported the change in regulatory language that would allow 
deference for any Form I-129 petition--not just extension requests. The 
campaign said that the acknowledgment that a petition may be filed with 
the same parties and underlying facts, other than for the purpose of an 
extension, would benefit everyone. A company endorsed the broadened 
scope of deference to include all requests filed on Form I-129 as an 
``appreciated acknowledgment that these efficiencies can also exist in 
other types of Form I-129 filings involving the same parties and 
underlying facts.'' A joint submission, citing statements from the 
current USCIS Policy Manual, agreed that this change would ensure that 
the deference policy would not be misread as limiting deference to 
extensions and excluding other types of requests involving the same 
parties and material facts. To provide additional clarity on this 
point, the joint commenters encouraged DHS to replace the current title 
of 8 CFR 214.1(c) with ``Extensions of Stay and Other Requests Filed on 
Form I-129.''
    Response: DHS agrees with the benefits of new 8 CFR 214.1(c)(5) 
applying to all nonimmigrants using Form I-129 involving the same 
parties and the same underlying facts, not just to those seeking an 
extension of stay. Those seeking a change of status, amendment or 
extension of stay, or consular notification of approval warrant the 
same deference unless there is a material error involved with a prior 
approval, material change in circumstances or eligibility requirements, 
or new, material information adversely impacting the petitioner's, 
applicant's, or beneficiary's eligibility. DHS would also note that 
nothing in this provision modifies general eligibility requirements for 
a change or extension of status. Extending deference to any request 
filed on Form I-129 involving the same parties and underlying facts 
broadly enhances efficiency and consistency.
    DHS declines to replace the title of current 8 CFR 214.1(c) with 
``Extensions of Stay and Other Requests Filed on Form I-129.'' DHS 
acknowledges that the current title of 8 CFR 214.1(c) (``Extensions of 
stay'') may initially create confusion as to the applicability of the 
deference provisions to I-129s other than those requesting an extension 
of stay. However, DHS would also note that the commenter's proposed 
title revision may also create confusion, as current 8 CFR 214.1(c) 
does not exclusively pertain to requests filed on Form I-129. For 
instance, 8 CFR 214.1(c)(2) pertains to extensions filed on Form I-539, 
and 8 CFR 214.1(c)(3) lists classifications ineligible for extension of 
stay. DHS believes this provision is most appropriately placed under 8 
CFR 214.1(c) as proposed.
    Comment: A professional association said it understood, as part of 
DHS's proposed codification, that deference would not apply in cases of 
past USCIS eligibility determinations involving the same employer and 
position but a different beneficiary. The association concurred that 
deference would not be appropriate in such contexts.
    Response: DHS agrees that deference should not be afforded to 
determinations involving the same employer and position but a different 
beneficiary.
    Comment: Several commenters raised concerns with the proposed 
regulatory language limiting deference when there has been a material 
change in eligibility requirements and the potential impact on future 
adjudications. For example, a couple of companies said it is unclear 
whether the term ``eligibility requirements'' refers to the employer's 
role requirements or the substantive requirements for H-1B eligibility, 
with one company stating that the latter interpretation could allow the 
Department to change the rules ``midgame'' and deny future extensions 
to individuals already on H-1B status. The companies, therefore, urged 
DHS to amend the regulatory text to state

[[Page 103095]]

clearly that the change in eligibility requirements refers to an 
employer's requirement for the role, not other regulatory or 
administrative changes. Similarly, a university expressed concern that 
USCIS would not grant deference to long-time H-1B holders where there 
is a change in eligibility (e.g., due to the degree requirement), even 
when the position and position requirements remain unchanged. The 
university, therefore, suggested that DHS remove the change in 
eligibility from the proposed deference regulation, or, alternatively, 
create an allowance for current H-1B holders, particularly if they are 
beneficiaries of an employment-based immigrant visa petition. While 
also expressing concerns about the potential impacts of the new 
requirements on those with approved H-1B visas, an association 
suggested that DHS remove the phrase ``or eligibility requirements'' 
from the proposed deference provision.
    Similarly, a joint submission expressed concern with the inclusion 
of the term ``material change in circumstances or eligibility 
requirements'' in the description of factors that would lead to a 
decision to decline to give deference to a prior adjudication. See 
proposed 8 CFR 214.1(c)(5). The commenters wrote that many H-1B 
beneficiaries and their accompanying family members have been waiting 
for an immigrant visa to become available for ``well over a decade,'' 
and these individuals justifiably rely on the ability to obtain future 
extensions of stay as long as the facts and circumstances of employment 
remain the same. Specifically, the joint commenters cautioned that the 
proposed changes to ``specialty occupation'' would jeopardize future 
extensions of stay for those who are ``established and respected 
members of their professional and local communities.'' Moreover, the 
commenters said it would be ``intrinsically inequitable'' to subject 
individuals who have acted in good faith to maintain legal status to 
unpredictable policy interpretations of changing administrations. 
Accordingly, the commenters urged DHS to amend the proposed description 
of the factors that would preclude an exercise of deference by removing 
the reference to ``changing eligibility requirements.''
    Response: DHS declines to remove the reference to ``eligibility 
requirements'' from new 8 CFR 214.1(c)(5). Under 8 CFR 103.2(b)(1), an 
applicant or petitioner must establish eligibility for the requested 
benefit at the time of filing the benefit request. It is unclear how 
USCIS adjudicators could determine eligibility for the requested 
benefit if they defer to prior determinations made under different 
eligibility requirements. It is important to note that inclusion of 
``eligibility requirements'' in this provision does not mean that a 
beneficiary previously found eligible will necessarily be found 
ineligible in future filings. Rather, as implemented at new 8 CFR 
214.1(c)(5), when there has been a material change in eligibility 
requirements USCIS adjudicators ``need not give deference'' and will 
fully review the facts and regulations in place at the time of filing. 
With respect to the specific concern over provisions related to the 
specialty occupation determination, DHS reiterates that revisions to 
the regulatory language codify and better reflect adjudication 
practices. A position that was previously correctly determined to meet 
the definition of a specialty occupation should continue to do so and a 
beneficiary that was previously correctly determined to be qualified 
for such occupation should remain so qualified.
    Comment: Many other commenters expressed particular concern with 
the intersection of the deference codification and the proposed changes 
to the definition and criteria of ``specialty occupation.'' One such 
commenter said that attorneys had observed a limitation in the 
deference policy: that deference is ``irrelevant'' unless a 
professional first qualifies under the revised specialty occupation 
standards. A university similarly wrote that the changes to the 
definition of specialty occupation constitute material changes that 
would eliminate USCIS' deference to a prior petition, thereby 
eliminating predictability and forcing employers to demonstrate anew 
that the position qualifies as a specialty occupation. A business 
association also highlighted the ``tension'' between the two 
provisions, stating that USCIS cannot defer to a prior decision if a 
job no longer qualifies as a specialty occupation. As such, the 
association warned that the deference policy would not promote 
certainty and efficiency for those who have been ``caught up'' in the 
immigration process and who rely on long-standing definitions; rather, 
it would lead to ``substantial business disruptions,'' harming its 
member companies, employees, and their family members.
    A professional association said that in cases where a specialty 
occupation eligibility determination has already been made, the 
fairness and reliance interests would be particularly acute in the 
airline pilot industry, which involves extensive training and requires 
extended time horizons for planning, scheduling, and service decisions. 
In this context, the association continued, reversing prior eligibility 
determinations could disrupt the airline industry, causing harm to 
pilot visa holders, their families, employers, crewmembers, and U.S. 
airline consumers. The association additionally noted that the same 
fairness and reliance interest would be implicated where DOS made the 
prior eligibility determination, rather than by USCIS itself.
    A trade association supported the intent to codify USCIS' existing 
deference policy but said that, given the scope of changes contained in 
the proposed rule, it would be necessary for USCIS to outline how it 
would address changes in requirements during the intervening period 
between an initial H-1B approval and the time for when a new Form I-129 
is filed.
    Echoing the above concerns, many commenters encouraged DHS to 
proceed with codifying the deference policy while requesting 
clarification that any modifications to program requirements and 
standards would only apply to initial petitions filed after the rule's 
effective date. A joint submission urged DHS to adopt this approach to 
ensure that the codification of USCIS' deference policy fulfills the 
proposed rule's goal of creating ``predictability for petitioners and 
beneficiaries and . . .fairer and more reliable outcomes.'' The 
commenters added that if the agency were to apply the changes for 
requirements or standards to individuals already in the immigration 
process, it would increase burdens and lead to unpredictable outcomes, 
harming employees, their families, and employers. A trade association 
cautioned that, as proposed, the provision would not protect employees 
already in the immigration process. The association urged DHS to 
clarify that changes to H-1B eligibility requirements would not apply 
to nonimmigrants who are in the immigrant visa backlog, reasoning that 
such individuals have relied on the current requirements for many 
years, and applying new standards could result in their loss of status 
or removal from the United States. The association thus encouraged DHS 
to protect employees and their families by ensuring that the new 
eligibility requirements would only apply to beneficiaries of initial 
petitions filed after the rule's effective date--not current H-1B 
beneficiaries who are already in the process. Another association, 
echoing these comments, reasoned that this clarification would

[[Page 103096]]

ensure fair and consistent adjudications. The association added that 
changing the requirements for individuals who have already been granted 
H-1B status before the final rule takes effect would harm its member 
companies' employees and their families while creating an ``extremely 
unpredictable adjudication environment.''
    In line with the above recommendations, a business association 
proposed--outside of abandoning the specialty occupation changes--that 
DHS clarify that any deference policy would not apply new eligibility 
criteria to beneficiaries and families residing and working in the 
United States prior to the promulgation of the new standards. Instead, 
the association wrote, the new H-1B eligibility criteria should only 
apply to those whose initial petition was filed after the rule's 
finalization, and USCIS should delay the implementation of the 
requirements by at least 6 months to provide stakeholders with 
sufficient time to adapt and adjust their business practices 
accordingly. A professional association, expressing support for 
deference, additionally urged DHS to limit deference to petitions 
involving new employment and not use the policy to revoke or reconsider 
the eligibility of existing H-1B, E-3, or H-1B1 pilot visa holders or 
deny petitions for pilot visa holders to continue their current 
employment, make changes to their employment with their current 
employer, obtain concurrent employment, or change employers.
    Several commenters proposed that DHS extend deference to the 
initial petitions of current H-1B holders. For example, a trade 
association suggested that DHS clarify that deference would be applied 
``liberally'' to avoid re-adjudication under changed requirements 
during routine H-1B extensions or renewals. The association reasoned 
that H-1B beneficiaries often have resided in the United States for 
many years as they await the finalization of the immigrant visa 
process, and denying extensions based on new requirements would cause 
significant harm to visa holders, their employers, ongoing company 
projects, and the U.S. economy. The association added that changing 
program requirements without a correspondingly strong deference policy 
could harm families who have spent decades establishing their lives in 
the United States. A company similarly expressed concern about ensuring 
the opportunity to leverage deference for long-term H-1B visa holders 
due to the immigrant visa backlogs. The company said that these 
employees, who may have earned their bachelor's degrees long before the 
existence of today's specialized degree fields, have a strong case for 
deference given the number of times USCIS has reviewed their 
circumstances in prior petitions under the same employer. Thus, the 
company concluded that longstanding H-1B holders should not be given 
less certainty than others about the ability to maintain their status 
while awaiting an immigrant visa, and urged DHS to clarify that 
deference can and should apply in such circumstances. Another company 
similarly encouraged DHS to extend deference to H-1B holders who could 
otherwise be impacted by other proposed changes, such as the revisions 
to the definition of ``specialty occupation.'' A trade association 
likewise proposed that DHS specify in the final rule that deference 
would be based on the same standards and language contained in the 
original H-1B approval.
    In line with the above remarks, an advocacy group urged the 
Department to ``grandfather in'' petitions that were approved before 
the finalization of key changes, such as the proposed definition of 
``specialty occupation.'' In the absence of such a policy, the advocacy 
group warned that previously approved petitions could be subject to 
full adjudication, undermining the improved efficiencies promised by 
the deference provision. The advocacy group additionally expressed 
concern that holding petitions subject to a stricter standard than when 
they were approved would lead to denials, resulting in those with 
longstanding H-1B status being forced to leave their jobs and the 
United States. In light of these concerns, the commenter encouraged DHS 
to clarify that deference can apply to filings that were approved 
before the definition changes.
    Response: DHS acknowledges the concerns expressed by various 
commenters pertaining to the deference policy and its intersection with 
H-1B eligibility requirements, including the revised definition of and 
criteria for ``specialty occupation'' promulgated in this rule. 
However, DHS reiterates that an applicant or petitioner must establish 
eligibility for the requested benefit at the time of filing the benefit 
request. DHS also reiterates that the deference provision codified in 
this rule applies to all requests on Form I-129 involving the same 
parties and underlying facts, not only to H-1B petitions. It is unclear 
how USCIS could create an exception to this requirement when 
adjudicating H-1B petitions, nor did DHS propose to do so in the NPRM. 
It is conceivable that future regulatory changes impacting other 
nonimmigrant visa classifications may occur which require petitioners 
to reestablish eligibility for the classification upon renewal. It 
seems that what commenters are requesting, with respect to deferring to 
eligibility determinations under previous regulatory requirements 
rather than those in place at the time of filing, goes beyond the scope 
of this rule and has much larger implications for all petitions and 
applications filed with USCIS.
    DHS also reiterates that the specialty occupation provisions of 
this rule codify current USCIS policy. Because regulatory changes to 
the definition and criteria for specialty occupations are codifying 
current USCIS adjudication practices, a position that was previously 
correctly determined to meet the definition of a specialty occupation 
should continue to do so and a beneficiary that was previously 
correctly determined to be qualified for such occupation should remain 
so qualified.
    Comment: Several commenters suggested changes to the language 
related to material error and general circumstances where deference 
would not apply. For example, a trade association and a joint 
submission welcomed the codification of deference but requested that 
DHS modify the ``material error'' standard to specify ``pure errors of 
law.'' While stating the need for ``more strength and clarity'' in the 
regulations, the association reasoned that the ``material error'' 
standard is too broad and could create confusion for adjudicators.
    Response: DHS declines to revise the first enumerated exception to 
the deference policy at new 8 CFR 214.1(c)(5) from ``material error'' 
to ``pure errors of law.'' This proposed exception would too greatly 
narrow the level of discretion needed by USCIS adjudicators, such that 
consideration of material errors of fact, which may significantly 
impact eligibility for the requested classification or action, would be 
precluded.
    Comment: A trade association urged DHS to explicitly state in the 
regulation that deference to prior adjudications applies to petitions 
involving changes in client locations, provided there are no other 
substantive changes in the role. Providing examples, the association 
said that when there is a change in client location, there often is no 
significant change in the worker's job duties. The association 
concluded that deference to prior adjudications where the role itself 
has not materially changed, would streamline the process and reflect 
the realities of modern consulting and technology roles.

[[Page 103097]]

    Response: DHS declines to explicitly state in the regulation that 
deference to prior adjudications applies to petitions involving changes 
in client locations when there are no other substantive changes in the 
role. If a change in client location requires a new LCA, as determined 
by DOL regulations, the new location would constitute a material 
change. As such, DHS declines to codify in the regulations a blanket 
application of the deference policy for changes in client locations.
    Comment: While endorsing the proposed codification, a company 
suggested that DHS clarify the circumstances where deference would not 
apply. In particular, to safeguard the intent behind the proposed 
codification and encourage the accurate application of the policy, the 
company requested that DHS clarify what constitutes ``a material error 
involved with a prior approval;'' ``a material change in circumstances 
or eligibility requirements;'' and ``material information that 
adversely impacts the petitioner's, applicant's, or beneficiary's 
eligibility.'' The company additionally proposed that USCIS provide 
examples for adjudicators and petitioners, and if such circumstances 
are already defined in other regulations, these should be included in 
the rule as a point of reference. A form letter campaign also suggested 
further clarification around what would constitute a material change 
(e.g., a change in SOC code, a change in worksite address within the 
same Metropolitan Statistical Area (MSA), or a more than 50-percent 
difference in job duties).
    Response: DHS declines to identify specific scenarios that would 
definitively fall under the enumerated exceptions to the deference 
policy, as USCIS decides each matter according to the evidence of 
record on a case-by-case basis. DHS notes generally that the exceptions 
to deference due to material error, material change in circumstances or 
eligibility requirements, or new material information, are intended to 
account for legal and factual errors, changes, or new information that 
impacts eligibility for the requested benefit or classification. A fact 
is material if it would have a natural tendency to influence or is 
predictably capable of affecting the decision.\67\
---------------------------------------------------------------------------

    \67\ See Kungys v. United States, 485 U.S. 759, 770-72 (1988).
---------------------------------------------------------------------------

    An example of a material error of fact may include an incorrect 
determination that a beneficiary had earned the required licensure for 
their occupation. A material error of law involves the misapplication 
of an objective statutory or regulatory requirement to the facts at 
hand. As held in Matter of Simeio Solutions, LLC, a change in 
geographic area of employment that would require a new LCA is 
considered a material change. For example, a change in location may 
impact eligibility if the new location is in an MSA with a higher wage. 
DHS declines to identify a specific percentage of job duties that must 
remain the same for deference to apply, such as 50 percent as suggested 
by commenter. There could be scenarios where only one job duty changes, 
but that job duty is the core function of the position and would 
constitute a material change. Because the possibilities and types of 
duties for each occupation are numerous, each case will be decided on 
its merits and on the evidence provided. A material change in 
eligibility requirements may include a change in statute or regulation 
that implements new requirements to qualify for the requested 
classification. New material information that adversely impacts the 
petitioner's, applicant's, or beneficiary's eligibility includes 
information not previously available that would impact eligibility. An 
example may include information that the beneficiary's license, which 
is required to perform the job, has been revoked by the licensing 
authority. New material information impacting eligibility also includes 
information that affects national security or public safety garnered 
from security checks conducted on beneficiaries and petitioners. 
Likewise, USCIS officers do not defer to a prior approval when there 
are indicators of potential fraud or willful misrepresentation of a 
material fact as that is new material information that adversely 
impacts eligibility.\68\
---------------------------------------------------------------------------

    \68\ See USCIS Policy Manual, Volume 2, ``Nonimmigrants,'' Part 
A, ``Nonimmigrant Policies and Procedures,'' Chapter 4, ``Extension 
of Stay, Change of Status, and Extension of Petition Validity,'' 
https://www.uscis.gov/policy-manual/volume-2-part-a-chapter-4.
---------------------------------------------------------------------------

    Comment: A form letter campaign, expressing support for the 
deference policy, said that the proposed regulations fail to define 
what is considered the ``same parties,'' citing, for example a company 
going through a corporate restructuring and renaming but having the 
same FEIN, or a merger in which the company is acquired under a new 
FEIN.
    Response: The term ``same parties'' in this context refers to the 
same petitioner and the same beneficiary. DHS declines to identify 
changes to the petitioning employer which definitively impact the 
``same parties'' determination. However, DHS notes that a mere name 
change of the petitioner generally would not result in the petitioner 
being considered a different party. Similarly, where an amended 
petition is not required under INA sec. 214(c)(10), 8 U.S.C. 
1184(c)(10), the parties would generally be considered the same for 
purposes of deference. Conversely, if a petitioner is acquired under a 
new FEIN in a corporate restructuring and the terms and conditions of 
employment have changed, the petitioner would not generally be 
considered the same party for purposes of deference.
    Comment: A form letter campaign requested further guidance on what 
an adjudicating officer must prove if they decide not to defer to prior 
determinations.
    Response: DHS is codifying current USCIS deference policy, which 
requires the officer who determines that deference is not appropriate 
to acknowledge the previous approval(s) in the RFE, NOID, or denial. 
The officer must articulate the reason for not deferring to the 
previous determination (e.g., due to a material error, material change 
in circumstances, or new adverse material information). Officers will 
generally provide the petitioner an opportunity to respond to the new 
information. See 8 CFR 103.2(b)(16)(i).
    Comment: While expressing support for the proposed codification of 
the current deference policy, a few commenters encouraged DHS to extend 
the provision to include deference to H-1B cap exemption 
determinations.
    A professional association remarked that the proposed codification 
of the deference policy would be helpful but is insufficient to address 
deference to prior cap exemption determinations. The association 
reported situations where practitioners received different outcomes on 
petitions requesting cap exemption filed by the same employer with 
identical evidence to the same USCIS Service Center. Thus, to increase 
efficiency and predictability, the association suggested that DHS also 
apply deference to cap exemption determinations and suggested some 
modifications to proposed 8 CFR 214.1(c)(5).
    To provide additional certainty to employers on cap exemption 
determinations, the association suggested that DHS adopt other 
measures, such as annotated approval notices, a lookback policy for 
establishing the validity of previous cap-exemption determinations, and 
requirements for petitioners to update USCIS with current evidence 
confirming their eligibility for cap exemption.
    The association added that USCIS could foster greater 
predictability and

[[Page 103098]]

transparency by publishing a list of cap-exempt employers, to be 
updated periodically, which the commenter said would aid employers in 
planning and would assist H-1B workers who may not always be aware of 
whether they have been counted against the cap when contemplating a 
move to a different employer. The commenter proposed adding regulatory 
text in line with these suggestions.
    An association of local government agencies similarly conveyed 
concerns from its members about ``inconsistent and perplexing'' 
decisions on cap exemption and proposed that once USCIS determines that 
an organization is exempt from the cap, it should defer to that 
determination ``for a reasonable period of time.'' The association 
suggested that USCIS define the duration of that reasonable period and 
annotate Forms I-797A and I-797B approval notices to confirm the grant 
of a cap exemption. The association reasoned that the current approach 
leads to ``unpredictable'' and ``unfair'' results when separate 
petitions containing identical information result in different 
determinations. The association further stated that the current 
adjudication process is inefficient and costly both for USCIS and 
nonprofit employers, as the process involves the review of extensive 
evidence by multiple officers, inconsistent decisions, RFEs, and NOIDs. 
The association added that deference to prior cap exemption 
determinations would align with the proposed rule's replacement of 
deference in the case of ``an extension of petition validity'' with 
deference to a prior ``request filed on Form I-129.''
    In line with other commenters, a local government agency expressed 
concern about inconsistent decisions on cap exemption by USCIS and 
administrative burdens associated with RFEs and NOIDs. The agency 
recommended, in giving H-1B program stakeholders more predictability, 
that the Department state in the final rule that cap exemptions are 
within the ambit of the deference policy that the NPRM proposes to 
codify.
    An advocacy group, expressing support for the deference 
codification, suggested that DHS implement a blanket cap-exemption 
approval system for nonprofit research organizations. The group 
reasoned that providing a blanket approval of an organization's status 
as a nonprofit research organization for 1 or 2 years would streamline 
the application process for individual visas while preserving 
adjudicatory resources.
    Response: DHS recognizes these commenters' concerns and the need 
for consistent and predictable determinations of cap-exempt status. 
However, DHS declines to expand the deference provision to include cap 
exemption determinations on petitions not involving the same parties 
and the same underlying facts. DHS did not propose through the NPRM to 
defer to prior cap-exempt determinations as a standard adjudicative 
practice. DHS further did not propose to establish a new, separate 
blanket approval process for the status of nonprofit research 
organizations or otherwise implement new operating procedures relating 
to cap exemption determinations. New 8 CFR 214.1(c)(5) codifies USCIS 
deference policy with respect to I-129 petitions involving the same 
parties and the same underlying facts. This approach strikes an 
appropriate balance to ensure fact specific adjudication. Furthermore, 
through this rule DHS is revising H-1B cap exemption provisions to 
provide additional flexibility to petitioners. These revisions may 
allay many of these commenters' concerns by leading to greater 
consistency and clarity and potentially reducing the issuance of RFEs 
and NOIDs involving cap-exempt status.
    DHS disagrees with the commenters' statements that extension of the 
deference policy to any new request filed on Form I-129, not just 
limited to those requesting an extension of stay, suggests that 
deference may be extended to a petitioner's cap exemption eligibility 
even with different beneficiaries. New 8 CFR 214.1(c)(5) explicitly 
states that the same parties and same underlying facts must be involved 
for deference to apply.
    Comment: A trade association and business association requested 
that DHS clarify the application of the deference policy in scenarios 
involving more than one adjudicating agency, such as the blanket L-1 
visa process. The commenters suggested that additional clarity in this 
area would reduce burdens on employers and their employees while 
improving efficacy in the adjudicatory process.
    Response: DHS reiterates that, under current policy, USCIS officers 
consider, but do not defer to, previous eligibility determinations on 
petitions or applications made by U.S. Customs and Border Protection 
(CBP) or DOS. Officers make determinations on the petition filed with 
USCIS and corresponding evidence on record. This rule codifies and does 
not change this existing policy.
    Comment: A legal services provider agreed with the codification of 
the existing deference policy and requested that DHS extend deference 
to portions of a petition that have not changed, such as in cases where 
a petitioner obtains L-1B approval based on specialized knowledge and 
subsequently files a petition to change to L-1A status with the same 
company to assume a management position. The commenter acknowledged 
that the material change with the U.S. position prevents USCIS from 
deferring to the entire prior approval but suggested that USCIS should 
give deference to the previous determination that the beneficiary's 
employment abroad met the requirements for L-1 status.
    Response: DHS declines to codify deference to portions of 
petitions. The NPRM proposed to codify existing USCIS deference policy, 
which requires the same parties and the same underlying facts. DHS 
believes this approach improves efficiency and consistency while 
ensuring that officers conduct necessary fact specific determinations 
in adjudications.
5. Evidence of Maintenance of Status
    Comment: A couple of commenters expressed general support for the 
proposed provisions related to the evidence of maintenance of status. A 
commenter stated that requiring such evidence streamlines the process 
and ensures compliance. A trade association expressed appreciation for 
DHS's clarification of policies related to maintenance of H-1B status.
    Response: DHS agrees that new 8 CFR 214.1(c)(6) will streamline and 
clarify the process and help ensure compliance.
    Comment: Several commenters expressed general opposition to the 
proposed evidence of maintenance of status provision. A commenter 
expressed dissatisfaction with the proposal, adding that prior 
companies are unlikely to provide the forms USCIS is requesting, such 
as tax returns. Another commenter remarked that the proposed provision 
adds complexity to the process, potentially resulting in delays and 
increased compliance costs. A commenter called the proposal a 
``dramatic change'' in the way nonimmigrant applications can be 
appealed in the event of a denial, adding that it is beyond the 
statutory authority granted by Congress and should be withdrawn. An 
advocacy group called the proposed provision ``troubling,'' stating it 
appears USCIS is seeking to punish employees whose employers have not 
paid full wages, which in turn undermines the ability of the Department 
of Labor to compel wage payment. A trade association objected to the 
proposal, stating the new requirement creates a situation where the 
approval of a petition may be

[[Page 103099]]

contingent on the beneficiary's ability to produce evidence that may be 
unavailable at the time of filing.
    Response: New 8 CFR 214.1(c)(6) provides a non-exhaustive list of 
documents which may be submitted as evidence of maintenance of status. 
Petitioners are not required to submit every item listed and may submit 
alternate documentation not listed. DHS disagrees that this provision 
adds complexity, delay, or increased compliance costs. Rather, DHS 
expects that explicitly requiring evidence of maintenance of status at 
the time of petition filing will likely mitigate delay, by reducing the 
need to request additional evidence through RFEs or NOIDs. Based on 
USCIS experience, documents that evidence maintenance of status are 
often readily available in the normal course of business and are 
regularly and voluntarily submitted with extension petitions. DHS 
disagrees that this is a dramatic change in how denials can be 
appealed, noting that the language in this provision already exists. As 
noted in the preamble of the NPRM, new 8 CFR 214.1(c)(7) contains the 
same language as current 8 CFR 214.1(c)(5) except with added references 
to an ``amendment'' of stay and other non-substantive edits. 88 FR 
72870, 72882 (Oct. 23, 2023). DHS rejects the claim that USCIS is 
seeking to punish employees whose employers have not paid full wages. 
This rule does not preclude employees from filing a wage-related 
complaint with DOL (or another governmental entity). By including a 
non-exhaustive list at new 8 CFR 214.1(c)(6), petitioners are given 
flexibility in the types of documentation which may be submitted to 
evidence maintenance of status. DHS also recognizes that there may be 
scenarios where evidence of maintenance of status is not available at 
the time of petition filing. This rule clarifies at new 8 CFR 
214.1(c)(4) that USCIS may, in its discretion, excuse the late filing 
of an extension or amendment of stay request in certain circumstances.
    Comment: Multiple commenters provided mixed feedback on the 
proposed provision. A company expressed general support for the 
proposal, elaborating that it would provide helpful clarity to 
evidentiary requirements, assist adjudicators in conducting efficient 
reviews, and would likely decrease the instance of RFEs or NOIDs. 
Additionally, the company expressed support for the modernization of 
regulatory language and the proposed amendment to 8 CFR 214.2(h)(14) to 
remove the sentence ``[s]upporting evidence is not required unless 
requested by the Director.'' The company also suggested a modification, 
stating that petitioners that fail to provide sufficient evidence of 
maintenance of status with the initial filing should be afforded an 
opportunity for correction through a RFE, rather than resulting in 
immediate denial of the petition.
    While expressing agreement with the intent of the regulations to 
minimize the need for RFEs or NOIDs, an attorney remarked that the list 
of acceptable documents may embolden officers to expect and request 
more than what is typically required for approval. The attorney 
recommended using ``or'' instead of ``and'' in the final regulations. A 
law firm expressed that specification of the types of maintenance of 
status evidence that should be initially included with extension and 
amended petitions should advance the goal of reducing the issuance of 
RFEs and NOIDs. Additionally, the law firm provided a suggestion to 
specify that a change in an H-1B worker's remote work location is not a 
material change. A trade association commended DHS for proposing to 
codify evidentiary requirements, stating it provides certainty for 
employers and may result in a speedier adjudication process. However, 
the association suggested that DHS remove contracts and work orders in 
its list of evidence adjudicators may request, reasoning it would be 
unnecessarily onerous and subject to abuse.
    Response: DHS agrees that this provision will provide clarity on 
evidentiary requirements, assist with efficient review, and likely 
decrease the need for RFEs and NOIDs. This rule does not implement a 
requirement under which failure to provide sufficient evidence of 
maintenance of status with the initial filing will result in immediate 
denial. The requirement at new 8 CFR 214.1(c)(6) to provide evidence of 
maintenance of status with Form I-129 requesting extension or amendment 
of stay will not change USCIS policy that generally provides for 
issuance of an RFE, or for notice and an opportunity to respond, prior 
to the denial of a petition. Furthermore, the list of documents 
included at new 8 CFR 214.1(c)(6) provides examples of individual 
documents which may be provided, either on their own or in conjunction 
with other documents, to meet this requirement. DHS does not believe 
amending this proposed provision to read ``or'' instead of ``and'' is 
necessary, nor is removing specific document types from this list 
necessary. DHS would also note that this provision does not define what 
constitutes a material change to a beneficiary's employment. Rather, as 
clarified in the NPRM, providing evidence of maintenance of status will 
assist USCIS in determining whether the beneficiary was being employed 
consistent with the prior petition approval or whether there might have 
been material changes in the beneficiary's employment. 88 FR 72870, 
72881 (Oct. 23, 2023).
    Comment: A few commenters expressed concern that the proposal is 
ambiguous and potentially unduly burdensome. Despite the NPRM requiring 
proof that status had been maintained ``before the extension of stay 
request was filed,'' the commenters said that the NPRM does not provide 
a specific temporal reference for this evidence. The commenters added 
the NPRM implies that evidence covering two pay periods may be long 
enough, yet this reference does not appear in the text of the proposed 
regulation. As a result, the commenters said this suggested temporal 
limitation may be disregarded, and adjudicators may issue RFEs or NOIDs 
if a petitioning employer submits proof of salary payments for only two 
pay periods. The commenters urged USCIS not to send current petitioners 
and the agency's own adjudicators ``down a rabbit hole'' of long-past 
activities requiring unattainable proof of a beneficiary's past 
engagements, associations, and activities involving prior employers. 
The commenters suggested regulatory language expressly stating that the 
petitioner would only be required to provide evidence of the last two 
pay periods while employed by the petitioner and clarifying that a 
determination that a beneficiary has failed to maintain prior status 
would not preclude an adjudicator from favorably exercising discretion 
to restore status.
    A legal services provider expressed agreement with the added 
regulatory language stating that an amendment or extension must include 
proof the beneficiary has maintained status, reasoning it is current 
practice and necessary for USCIS to determine maintenance of status. 
The provider noted that USCIS sometimes issues RFEs for pay stubs 
covering a larger period, despite the I-129 instructions stating the 
beneficiary may provide the ``last two pay stubs.'' An advocacy group 
thanked the Department for the clarification on evidence of maintenance 
of status, while also expressing the need for an exception for 
documentation in the event a medical condition resulting in leave of 
absence for the beneficiary.
    Response: DHS declines to codify specific temporal parameters on 
evidence of maintenance of status under

[[Page 103100]]

new 8 CFR 214.1(c)(6). Petitioners should adhere to these regulations 
in conjunction with USCIS form instructions, which state that the 
petitioner may submit copies of the beneficiary's last 2 pay stubs, 
Form W-2, and other relevant evidence. Additionally, DHS recognizes 
that different employment positions have different pay structures and 
timelines, so codifying more specificity into this provision may be 
needlessly restrictive. 8 CFR 103.2(b)(8) already provides USCIS with 
the discretion to request missing required initial evidence or 
additional evidence to establish eligibility. DHS believes this 
provision strikes the balance of clarifying the requirement for 
evidence of maintenance of status with retaining flexibility for both 
petitioners and adjudicators. DHS also recognizes that employees may 
face circumstances necessitating a leave of absence from their 
employer. Current 8 CFR 103.2(b)(8) and 8 CFR 214.1(c)(6) as finalized, 
in conjunction with existing regulations and policies governing 
issuance of RFEs and NOIDs, allow for discretion in these situations.
    Comment: A commenter expressed concern with the following sentence 
found at 8 CFR 214.2(l)(14)(i), stating ``[An L-1] petition extension 
generally may be filed only if the validity of the original petition 
has not expired.'' Specifically, the commenter expressed concern that 
this sentence would negatively impact the ability of L-1 beneficiaries 
to extend their nonimmigrant status if they pursued an immigration 
benefit allowed by INA section 248 during the 3-year look-back period 
or entered the United States pursuant to a grant of advance parole. 
Thus, the commenter urged USCIS to remove the sentence from the 
regulatory text, which the commenter said would ``needlessly and 
unjustly'' prevent otherwise law-abiding L-1 petitioners and 
beneficiaries from accessing the intracompany transferee nonimmigrant 
visa classification in instances where a previously approved L-1 
petition had expired.
    Response: DHS did not propose to add a sentence to 8 CFR 
214.2(l)(14)(i) as described by the commenter. Current 8 CFR 
214.2(l)(14)(i) already includes the statement, ``A petition extension 
may be filed only if the validity of the original petition has not 
expired.'' As explained in the NPRM, through this final rule DHS is 
adding the word ``generally'' to this existing sentence to account for 
untimely filed extensions that are excused consistent with 8 CFR 
214.1(c)(4) and deleting the preceding sentence from current 8 CFR 
214.2(l)(14)(i) which states, ``Except in those petitions involving new 
offices, supporting documentation is not required, unless requested by 
the director.'' 88 FR 72870, 72881 (Oct. 23, 2023). This rule also did 
not change general requirements for eligibility to change or extend 
nonimmigrant status. Someone who was previously in L-1 status and seeks 
to change back to L-1 status while requesting an extension of stay may 
still do so, assuming they are qualified under existing requirements. 
New 8 CFR 214.1(c)(6) adds the requirement that such a request must 
include evidence that the beneficiary has maintained the previously 
accorded nonimmigrant status before the extension request was filed. 
Nothing in this rule precludes L-1 petitioners and beneficiaries from 
continuing to access the L-1 visa classification in instances where a 
previously approved L-1 petition has expired, assuming they are 
otherwise qualified under existing regulations and policies.
6. Eliminating the Itinerary Requirement for H Programs
    Comment: Several commenters stated their support for the 
elimination of the H program's itinerary requirement as it would 
eliminate administrative hurdles, unnecessary paperwork, duplicative 
content, would promote a more efficient adjudication process, and would 
lessen burdens on employers and employees.
    In voicing support for the removal of H program's itinerary 
requirement, an attorney reasoned that it would reduce the workload and 
burden of USCIS officers in issuing RFEs requesting missing 
itineraries. A trade association mentioned that it would be especially 
helpful for graduates performing medical residencies in H-1B status 
since they may be working at different sites. A university stated its 
removal would provide clarity, consistency and predictability to 
employers and beneficiaries alike. A legal services provider reasoned 
that it is difficult to provide an exact, accurate itinerary due to the 
varying schedule over the course of the requested H-1B period.
    Response: DHS agrees with the commenters that removing the 
itinerary requirement will help reduce unnecessary burdens and 
duplication of work for both petitioners and USCIS. As noted in the 
NPRM, and as further described below, the information provided in an 
itinerary is largely duplicative of information already provided in the 
LCA for H-1B petitions and the temporary labor certification (TLC) for 
H-2 petitions. 88 FR 72870, 72882 (Oct. 23, 2023).
    Comment: In contrast to the above remarks, a couple of commenters 
expressed their opposition to the removal of the H program's itinerary 
requirement and included reasoning to support their decision. An 
advocacy group stated that the itinerary requirement was intended to 
deter and detect fraud. The advocacy group cited a report from the 
Office of the Inspector General that stated, ``in many cases, the 
projects provided within the petition are non-existent which allows 
beneficiaries to arrive in the country and not work in accordance with 
the H-B agreements'' and concluded that eliminating the itinerary 
requirement ``will encourage more fraud.'' A research organization 
reasoned that itineraries provide agency officers easy access to 
important information that can be used to uncover fraud and abuse in 
the H-1B program. The research organization suggested rather than 
eliminate the itinerary requirement, petitioners should provide more 
detailed itineraries to demonstrate that the petitioner has non-
speculative employment.
    Response: DHS disagrees that eliminating the itinerary requirement 
compromises the integrity of the H-1B program. Information that has 
historically been provided on an itinerary is provided elsewhere with 
the petition and required documentation. For example, the LCA and TLC 
require the petitioner to list the name and address where work will be 
performed, as well as the name and address of any secondary entity 
where work will be performed. The Form I-129 also requires the 
petitioner to provide the address where the beneficiary will work if 
different from the petitioner's address listed on the form. Further, 
DHS is proposing other measures to improve the integrity of the H-1B 
program, including codifying its authority to conduct site visits. In 
fact, the Office of the Inspector General report cited by one of the 
commenters relates to site visits, which DHS is addressing and 
strengthening through this rule and does not mention the itinerary 
requirement as an integrity or anti-fraud measure. Finally, eliminating 
the itinerary requirement is consistent with USCIS policy memorandum 
PM-602-0114 following the decision of the U.S. District Court for the 
District of Columbia in ITServe Alliance, Inc. v. Cissna, 443 F. Supp. 
3d 14, 42 (D.D.C. 2020) (``the itinerary requirement in the INS 1991 
Regulation [codified at 8 CFR 214.2(h)(2)(i)(B)] . . . has been 
superseded by statute and may not be applied to H-1B visa 
applicants''). See also Serenity Info Tech, Inc. v.

[[Page 103101]]

Cuccinelli, 461 F. Supp. 3d 1271, 1285 (N.D. Ga. 2020) (citing 
ITServe).
7. Validity Expires Before Adjudication
    Comment: Several commenters expressed general support for proposed 
8 CFR 214.2(h)(9)(ii)(D)(1) and (2) allowing petitioners to amend 
requested validity periods where the validity expires before 
adjudication. A commenter expressed that the proposed provision 
provides flexibility and avoids unnecessary re-filing in case of 
delays. A trade association commended USCIS on providing necessary 
flexibility when adjudication surpasses the dates of intended 
employment, while a law firm remarked that USCIS should be granted the 
flexibility as outlined in this provision. Another trade association 
commended DHS for providing flexibility for member companies, while 
adding that the proposed provision would also reduce filing costs.
    A company expressed support for DHS's proposal, noting that when 
validity periods are not updated after the initially requested validity 
period has passed, serious consequences for the beneficiary can result. 
The company concluded that the proposed provision ``simply'' and 
``elegantly'' solves the issue.
    A legal services provider stated that the proposed provision would 
solve the issue of validity periods expiring before a petitioner wins 
an appeal by allowing the petitioner to modify the requested dates. An 
attorney commended the agency for the ``creative'' and ``appreciated'' 
provision. A trade association expressed favorable support for the 
option for petitioners to adjust the requested validity period if the 
petition is deemed approvable after the initially requested validity 
period expires. A joint submission expressed support for the proposed 
provision, noting the provision increases efficiency.
    Response: DHS agrees with the commenters that allowing petitioners 
to request amended validity periods where the validity period expires 
before adjudication will increase flexibility and efficiency for 
stakeholders. DHS appreciates the comments noting the anticipated time 
and cost savings associated with this change.

E. Benefits and Flexibilities

8. H-1B Cap Exemptions
    Comment: Several commenters expressed general support for the 
proposed H-1B cap exemption provisions at 8 CFR 
214.2(h)(8)(iii)(F)(2)(iv), (h)(8)(iii)(F)(4), (h)(19)(iii)(B)(4), and 
(h)(19)(iii)(C). A trade association applauded the proposed changes and 
said the changes will be a positive development to expand and 
strengthen the technology workforce. A professional association agreed 
and stated that the proposal would provide needed flexibilities to 
physicians and their employers as well as H-1B physician researchers. A 
company and a trade association stated that the proposal would be 
beneficial to public-private partnership programs between industry and 
nonprofits or universities. The trade association cited the CHIPS and 
Science Act of 2022 to indicate Congressional support for such 
collaborations. A university commented that the proposal would support 
international students and the growth of artificial intelligence, 
cybersecurity, education, and medicine sectors. An advocacy group 
stated that the proposal would support nonprofit contributions to 
public health, technological advancement, national security, and other 
national interests. A joint submission agreed that the proposal would 
support entrepreneurship and technological innovation, describing the 
commenters' partnerships with State governments for entrepreneurship 
programs. A joint submission wrote that the proposal would help legal 
services providers enlist needed H-1B labor.
    Response: DHS agrees that the changes to the H-1B cap exemption 
provisions will benefit a variety of industries, occupations, and 
petitioner populations.
    Comment: A legal services provider expressed general support for 
the proposed changes but also doubted that these changes would 
substantially increase the number of cap-exempt petitions.
    Response: DHS acknowledged in the NPRM that it does not have data 
to precisely estimate how many additional petitioners would qualify for 
the expanded cap exemptions, but estimates that a fairly small 
population, between 0.3 percent and 0.8 percent of annual petitioners, 
may no longer be required to submit H-1B registrations as a result of 
the changes to the cap exemption provisions. 88 FR 72870, 72934 (Oct. 
23, 2023). The NPRM specifically invited public comment regarding the 
number of additional petitioners that would qualify for cap exemption 
based on the modified standard as well as the percentage of current 
registrants (prospective petitioners that are cap subject) that may no 
longer have to submit a registration for the H-1B cap. The commenter 
did not provide data or cite to any research in support of their 
comment, nor did any other commenters provide data or research to 
specifically address DHS's estimate. DHS did not make any changes to 
its final analysis as a result of this comment.
    Comment: Some commenters opposed the changes to the cap exemption 
provisions. An advocacy group stated that they oppose the exemptions 
for universities, nonprofit research entities, and government research 
programs and recommended that ``[t]he caps should be lowered on visa 
programs and their benefits to employers should be removed.'' A few 
commenters generally stated that the proposal would increase abuse of 
the H-1B program through loopholes for outsourcing companies to bypass 
the cap, with one commenter noting that this change will ``flood'' H-1B 
visas to non-profit organizations.
    Response: DHS disagrees that these changes would provide loopholes 
to bypass the statutory cap. Congress set the current annual number of 
noncitizens who may be issued H-1B visas or otherwise provided H-1B 
status at 65,000, as well as the ``advanced degree exemption'' of an 
additional 20,000 H-1B visas for noncitizens who have earned a master's 
degree or higher from a U.S. institution of higher education. See INA 
sec. 214(g)(1), (5), 8 U.S.C. 1184(g)(1), (5). Congress also 
established the exemptions to the annual H-1B cap for workers who will 
be employed at an institution of higher education (as defined in 
section 101(a) of the Higher Education Act of 1965, as amended) or a 
related or affiliated nonprofit entity, and workers who will be 
employed at a nonprofit or governmental research organization.\69\ 
These exemptions are not numerically capped. See INA sec. 214(g)(5)(A)-
(B), 8 U.S.C. 1184(g)(5)(A)-(B). No provisions adopted in this final 
rule allow DHS to exceed the statutory limitation on the number of H-1B 
visas issued per fiscal year. Nor do the provisions allow DHS to create 
a new type of cap exemption.

[[Page 103102]]

Instead, these provisions are intended to clarify and simplify 
eligibility for the existing cap exemptions at INA sec. 214(g)(5), 8 
U.S.C. 1184(g)(5). The commenters did not provide data or cite to 
research to support their assertions concerning abuse of these current 
cap exemptions and how the new changes would significantly increase 
abuse of these cap exemptions. DHS does not expect these changes will 
increase abuse because the revised cap exemptions still contain 
meaningful limitations, such as the requirement that research is a 
fundamental activity of the petitioning entity.
---------------------------------------------------------------------------

    \69\ Congress did not define the terms ``nonprofit research 
organization'' and ``governmental research organization'' in INA 
sec. 214(g)(5), 8 U.S.C. 1184(g)(5). Because Congress did not define 
these terms and has delegated discretionary authority to DHS, DHS 
may reasonably define the terms consistent with their ordinary 
meanings and the overall statutory scheme. See Loper Bright 
Enterprises v. Raimondo, 144 S. Ct. 2244, 2263 (2024) (explaining 
that a statute's meaning may be that the agency is authorized to 
exercise a degree of discretion and empowered to prescribe rules to 
fill in statutory gaps based on ``reasoned decision making.''). In 
addition, DHS has express delegated authority to administer the 
immigration laws and issue regulations pursuant to INA section 
103(a), 8 U.S.C. 1103(a), and to issue regulations pertaining to the 
admission of nonimmigrants, and set conditions for nonimmigrant 
petitions pursuant to INA section 214(a) and (c), respectively, 8 
U.S.C. 1184(a) and (c).
---------------------------------------------------------------------------

    Comment: A commenter wrote that increasing cap exemptions without 
expanding immigrant visa limits would exacerbate backlog issues and be 
unfair to H-1B workers currently waiting for employment-based permanent 
residence in the United States.
    Response: DHS notes that Congress sets limits on the number of 
immigrant visas that can be issued each year and that DHS does not have 
the statutory authority to increase these limits. To the extent the 
commenter is requesting an increase in the number of immigrant visas, 
that request is beyond the scope of this rulemaking. While DHS is 
unable to precisely estimate how many additional petitioners will now 
qualify for cap exemption, the increase is expected to be small, and 
the commenter has not provided any evidence to the contrary. Further, 
not every beneficiary of a cap-exempt H-1B petition will ultimately 
seek an immigrant visa. Additionally, nothing prohibits a noncitizen 
from applying for an immigrant visa while outside the United States 
based on a qualifying family relationship, offer of employment, or 
another applicable basis. The order of consideration for immigrant 
visas is based on the applicable priority date, preference category, 
and country of chargeability. 8 U.S.C. 1152, 1153(e). The fact that a 
small number of additional noncitizens may be provided H-1B status 
annually is unlikely to materially impact overall demand for immigrant 
visas or cause those currently applying for an immigrant visa or 
adjustment of status to wait longer. Thus, DHS believes that impacts to 
immigrant visa processing or retrogression are speculative and, to the 
extent there is an impact, it is likely to be small. Further, DHS notes 
that USCIS has taken a number of steps to assist individuals who may be 
waiting for an ``immediately available'' immigrant visa.\70\ As 
explained in the NPRM and in this final rule, the intent of the changes 
to the regulations related to H-1B cap exemption is to clarify, 
simplify, and modernize eligibility for cap-exempt employment, and to 
provide additional flexibility to petitioners to better implement 
Congress's intent to exempt from the annual H-1B cap certain H-1B 
beneficiaries who are to be employed at a qualifying institution, 
organization, or entity. 88 FR 72870, 72883 (Oct. 23, 2023). Therefore, 
DHS believes that the benefits of these changes outweigh the potential 
impacts, if any, on immigrant visa backlogs.
---------------------------------------------------------------------------

    \70\ See USCIS, ``FAQs for Individuals in H-1B Nonimmigrant 
Status,'' https://www.uscis.gov/working-in-the-united-states/temporary-workers/h-1b-specialty-occupations-and-fashion-models/uscis-actions-to-support-adjustment-of-status-applicants-who-are-in-h-1b-status-in-the-united-states.
---------------------------------------------------------------------------

    Comment: A few commenters generally supported revising the 
requirements for beneficiaries who are not directly employed by a 
qualifying organization, reasoning that the changes acknowledge the 
value of their contributions and ensures that essential work, even if 
not directly related to the organization's core mission, is recognized 
and supported, leading to a more efficient and productive research 
ecosystem. A professional association supported the proposal to treat 
H-1B holders who contribute to the missions of qualifying organizations 
as cap-exempt, reasoning that doing so is consistent with Congressional 
intent to keep graduates and educators in the United States. The 
commenter also stated that the cap would be needed to facilitate 
expanding public-private partnerships between universities and 
industry. A law firm also supported the proposal as consistent with 
congressional intent and promoting flexibility, transparency, and more 
equitable outcomes.
    Response: DHS appreciates these commenters' support for the 
requirements to qualify for H-1B cap exemption when a beneficiary is 
not directly employed by a qualifying institution, organization, or 
entity. DHS believes these provisions add flexibility while retaining 
necessary guardrails to cap exemption determinations.
    Comment: An advocacy group opposed the proposal contending it would 
formalize a practice the commenter claimed nonprofits and companies 
already use to avoid H-1B caps on for-profit employees. The commenter 
referenced as examples a university's entrepreneur program and another 
similar entrepreneur program through which entrepreneurs may be exempt 
from the H-1B cap. A union cited the same article as the advocacy 
group, expressing concern about partnerships between research or 
nonprofit institutions and other entities seeking to qualify for cap-
exempt H-1B visas and stating they should be publicly disclosed to 
prevent abuse and exploitation of loopholes. The union also referenced 
a case where, the commenter wrote, an exploitative staffing agency was 
able to use the H-1B system by falsely claiming that school districts 
that would be employing H-1B visa holders had partnerships with public 
universities, and also referenced visa fraud litigation against another 
university. Likewise, a research organization wrote that the proposal 
would allow for-profit organizations to benefit from the cap exemption. 
The commenter referenced a 2016 letter from Senator Chuck Grassley as 
highlighting cases of universities abusing the H-1B program to evade 
cap limitations and stated that the proposal would contravene INA sec. 
214(g)(5). The research organization commented that USCIS failed to 
adequately address these concerns in the proposed rulemaking, and that 
USCIS did not justify the proposed changes or demonstrate the 
congressional intent for broad inclusion of beneficiaries who are not 
directly employed by qualifying employers and are ``splitting their 
time'' to conduct non-qualifying work. In line with these comments, the 
research organization urged DHS to withdraw proposed 8 CFR 
214.2(h)(8)(iii)(4) and (h)(19)(iii)(C), stating they unlawfully expand 
the positions and employers who may petition for a cap-exempt worker.
    Response: DHS acknowledges the stated concerns but disagrees with 
these commenters. Exemption from the H-1B cap for those employed at 
qualifying institutions is a feature of the H-1B program established by 
Congress. Congress established cap exemptions for H-1B workers who are 
petitioned for or employed at an institution of higher education or its 
affiliated or related nonprofit entities, a nonprofit research 
organization, or a government research organization. INA sec. 
214(g)(5), 8 U.S.C. 1184(g)(5). Some of the references cited by the 
commenter contain no evidence of abuse of the H-1B program or a use of 
the program that is contradictory to existing rules. Additionally, DHS 
did not propose to publicly disclose partnerships between research or 
nonprofit institutions and other entities seeking to qualify for cap-
exempt H-1B visas and declines to do so through this final rule.
    More generally, DHS recognizes the potential for program abuse and 
bad actors, but, false representations are not an issue limited to cap 
exemption. H-

[[Page 103103]]

1B program integrity is a matter of serious importance to DHS, and 
USCIS is continuously monitoring for potential fraud and abuse in the 
program. For example, through USCIS' Administrative Site Visit and 
Verification Program (ASVVP), immigration officers in the Fraud 
Detection and National Security Directorate (FDNS) make unannounced 
site visits to collect information as part of a compliance review to 
ensure petitioners and beneficiaries follow the terms and conditions of 
their petitions.\71\ USCIS takes a more targeted approach to site 
visits for certain employers and petitions and also encourages anyone 
to report suspected fraud or abuse in the H-1B program through the 
existing ICE Tip Form or other tip forms, as appropriate.\72\
---------------------------------------------------------------------------

    \71\ See USCIS, ``Administrative Site Visit and Verification 
Program,'' https://www.uscis.gov/about-us/organization/directorates-and-program-offices/fraud-detection-and-national-security-directorate/administrative-site-visit-and-verification-program (last 
reviewed/updated Mar. 6, 2023).
    \72\ See USCIS, ``Combating Fraud and Abuse in the H-1B Visa 
Program,'' https://www.uscis.gov/scams-fraud-and-misconduct/report-fraud/combating-fraud-and-abuse-in-the-h-1b-visa-program (last 
reviewed/updated Feb. 9, 2021). The ICE Tip Form is available online 
at https://www.ice.gov/webform/ice-tip-form (last visited Dec. 9, 
2024). Anonymous tips may alternately be reported to ICE via the 
toll-free ICE Tip Line, (866) 347-2423.
---------------------------------------------------------------------------

    The ability of USCIS to pursue and take action when fraud is found 
is enhanced by other provisions of this rule, including provisions 
requiring a bona fide job offer and bona fide employment and the site 
visit provisions. Additionally, DHS believes that H-1B cap exemption 
provisions, as finalized in this rule, contain sufficient guardrails to 
protect against abuse, particularly in the context of beneficiaries who 
are not directly employed by a qualifying institution, organization, or 
entity, as raised by the commenter. Notably, 8 CFR 
214.2(h)(8)(iii)(F)(4) governs the quantity and nature of work that 
must be performed to qualify for H-1B cap exemption when not directly 
employed by a qualifying institution, organization, or entity. 
Additionally, 8 CFR 214.2(h)(19)(iii) outlines specific requirements 
for qualifying institutions, organizations, and entities, including 
those with which petitioning employers may be affiliated. DHS believes 
that these provisions, in conjunction with other provisions related to 
H-1B program integrity, serve as adequate safeguards against abuse. The 
changes in this rule better implement Congress's intent to exempt from 
the annual H-1B cap certain H-1B beneficiaries who are employed at a 
qualifying institution, organization, or entity, while still protecting 
the integrity of the H-1B program, including the numerical allocations.
    Comment: A research organization requested that USCIS eliminate the 
allowance of cap exemptions for beneficiaries not ``directly'' employed 
by a qualifying institution by rescinding current 8 CFR 
214.2(h)(8)(iii)(F)(4), stating that doing so would reduce fraud and 
abuse.
    Response: DHS declines to eliminate the allowance of cap exemptions 
for beneficiaries not directly employed by a qualifying institution and 
did not propose to do so through the NPRM. Congress chose to exempt 
from the numerical limitations in INA sec. 214(g)(1) noncitizens who 
are employed ``at'' a qualifying institution, which is broader than 
being employed ``by'' a qualifying institution. USCIS interprets the 
statutory language as reflective of congressional intent that certain 
noncitizens who are not employed directly by a qualifying institution 
may nonetheless be treated as cap-exempt by virtue of the nature of 
their job duties.\73\ USCIS therefore allows a petitioner to claim 
exemption on behalf of a beneficiary if the beneficiary will spend the 
majority of their work time performing job duties at a qualifying 
institution that will further an activity that supports or advances one 
of the fundamental purposes, missions, objectives, or functions of the 
qualifying entity. New 8 CFR 214.2(h)(8)(iii)(F)(4). The burden remains 
on the petitioner to establish the qualifying work being performed by 
the beneficiary, and that one of the fundamental purposes, missions, 
objectives, or functions of the qualifying institution is either higher 
education, nonprofit research, or government research.
---------------------------------------------------------------------------

    \73\ See S. Rep. No. 106-260 (April 11, 2000) (stating, 
regarding S. 2045, the bill that was enacted into AC21, that 
individuals should be considered cap exempt ``. . . by virtue of 
what they are doing'' and not simply by reference to the identity of 
the petitioning employer).
---------------------------------------------------------------------------

    Comment: A joint submission supported the proposed amendment but 
recommended that, in light of difficulty in measuring the ``at least 
half'' standard, USCIS clarify that the standard be measured over the 
course of the petition's validity period, rather than a smaller unit of 
time. Similarly, an advocacy group recommended that USCIS provide an 
alternative standard of hours per week to clarify when a position 
qualifies under the ``at least half'' standard. Another joint 
submission supported the proposal as recognizing remote or hybrid work 
structures.
    Response: DHS appreciates the commenters' support for this change 
to 8 CFR 214.2(h)(8)(iii)(F)(4) and agrees that it will increase 
flexibility for employers and beneficiaries. DHS declines to specify 
that the standard be measured over the course of the petition's 
validity period. Codifying such specificity could potentially open the 
door for abuse of the requirements to qualify for H-1B cap exemption. 
For example, if a petitioning employer submits an H-1B petition 
requesting a 3-year period of employment, with the first 18 months of 
work to be conducted wholly at any otherwise cap subject employer, the 
beneficiary could conceivably change employment and never work at the 
qualifying cap-exempt institution. DHS also declines to specify a 
number of hours per week that will enable beneficiaries to qualify for 
H-1B cap exemption. Doing so would be impractical given varying work 
schedules. Furthermore, DHS believes such specificity is unnecessary 
because the ``at least half'' standard provides sufficient clarity. 
USCIS will continue to review each petition on a case-by-case basis to 
determine eligibility for H-1B cap exemption.
    Comment: A commenter wrote that the proposal would negatively 
impact U.S. workers in the technology and IT sectors, stating that 
these workers are currently facing mass layoffs. A research 
organization commented that the proposed ``at least half'' standard 
lacks rationale or adequate evaluation on the number of cap-exempt 
positions the proposal would create. The commenter wrote that the 
proposal would facilitate abuse of the H-1B program, referencing a case 
from a university as showing a qualifying entity requiring U.S. workers 
to train H-1B replacements for their positions.
    Response: DHS disagrees with these commenters' concerns with 
respect to these cap exemption provisions. The submission noting 
Americans in the technology and IT sector facing severe reductions in 
the job market did not provide data or resources to support this claim. 
DHS also notes that a revision from ``majority'' to ``at least half'' 
does not reflect a significant change in this requirement. Under 
existing regulations, a beneficiary could meet the ``majority'' 
standard by spending just a little more than 50% of their time working 
at a cap-exempt institution, organization, or entity. The new rule 
requires ``at least half'' of time, meaning 50% or more, which is not a 
significant change. Regarding the comment that the rule did not provide 
an adequate evaluation on

[[Page 103104]]

the number of cap-exempt positions the proposal would create, DHS notes 
that the NPRM generally projected a likely increase in the population 
of petitioners eligible for cap exemption but could not precisely 
estimate how many additional petitioners would now qualify. 88 FR 
72870, 72934 and 72915 (Oct. 23, 2023) (Table 12. Summary of Provisions 
and Impacts of the Proposed Rule). Evaluating such impact with 
specificity is not practically feasible as DHS does not have data on 
the number of petitions requesting cap exemption that were previously 
denied because they did not meet the prior ``majority of'' standard but 
would now be approvable because they would meet the new ``at least 
half'' standard.
    DHS acknowledges the commenter's concerns about potential abuse of 
the H-1B program. However, it is unclear from the sources cited by the 
commenter whether and how such abuses stem from existing cap exemption 
requirements, or whether such abuse would be further increased by 
revisions to cap exemption requirements as codified in this rule. The 
commenter claims without evidence that certain H-1B workers were 
previously subject to the cap. They further claim without basis that 
these same workers would be cap-exempt under the changes in this rule; 
such cap exemption status cannot be projected on a generalized level, 
as USCIS determines eligibility on a case-by-case basis.
    Comment: A form letter campaign wrote that the proposed ``at least 
half'' standard is an improvement but still exceeds statutory 
requirements. The campaign stated that H-1B employees may spend less 
than half of their time working for the qualifying entity while still 
being essential to that entity, additionally reasoning that measuring 
the ``at least half'' standard would impose administrative burdens. The 
campaign recommended that the regulatory text remove this standard.
    Response: DHS declines to remove the regulatory text requiring a 
beneficiary spend ``at least half'' of their time working at a 
qualifying institution to be eligible for cap exemption. Removing this 
requirement would effectively allow beneficiaries who spend any amount 
of time whatsoever at a qualifying institution, however minimal, to 
qualify for H-1B cap exemption. Such allowance would leave the door 
open for potential abuse of H-1B cap requirements. Additionally, DHS 
believes that allowing for H-1B cap exemption based on any time working 
at a qualifying institution would not align with congressional intent. 
DHS recognizes that Congress chose to exempt from the H-1B cap 
beneficiaries who are employed ``at'' a qualifying institution. DHS 
interprets this statutory language as reflective of Congressional 
intent that certain beneficiaries who are not directly employed by a 
qualifying institution may be treated as cap-exempt based on the nature 
of their job duties.\74\ DHS believes that the ``at least half'' 
standard implemented at 8 CFR 214.2(h)(8)(iii)(F)(4) helps ensure that 
individuals are effectively furthering an activity in support of one of 
the fundamental purposes of the qualifying institution.
---------------------------------------------------------------------------

    \74\ See USCIS, ``Guidance Regarding Eligibility for Exemption 
from the H-1B Cap Based on 103 of the American Competitiveness in 
the Twenty-First Century Act of 2000 (AC21)'' (Pub. L. 106-313) 
(June 6, 2006) (``Congressional intent was to exempt from the H-1B 
cap certain alien workers who could provide direct contributions to 
the United States through their work on behalf of institutions of 
higher education and related nonprofit entities, or nonprofit 
research organizations, or governmental research organizations.''), 
https://www.uscis.gov/sites/default/files/document/memos/ac21c060606.pdf.
---------------------------------------------------------------------------

    Regarding the comment about administrative burdens, it is true that 
petitioners will continue to bear the burden of establishing 
eligibility for cap exemption. However, employers should be able to 
clearly document their H-1B beneficiaries' job duties and the typical 
work schedule. The requirement that a beneficiary spend at least half 
of their time at a qualifying institution strikes a reasonable balance 
between offering flexibility while maintaining program guardrails.
    Comment: A couple of joint submissions supported the proposed text 
as recognizing that an organization may have more than one fundamental 
purpose, mission, objective, or function and the cap-exempt petitioner 
need not show the beneficiary's work contributes to all these purposes.
    Response: This change updates the availability of cap exemptions to 
include beneficiaries whose work directly contributes to, but does not 
necessarily predominantly further, the qualifying organization's 
fundamental purpose, mission, objectives, or functions, which DHS 
believes to be a more reasonable standard. Further, this change 
reflects the modern reality that a qualifying organization may have 
more than one fundamental purpose, mission, objective, or function, 
which should not preclude an H-1B beneficiary from being exempt from 
the H-1B cap.
    Comment: A form letter campaign stated that the proposed text is 
burdensome, unclear, and unduly restrictive. The campaign recommended 
that ``namely, either higher education, nonprofit research, or 
government research'' be stricken, providing an example as indicating 
where an H-1B employee could perform duties at a hospital that are 
essential but clinical rather than focused on higher education or 
research.
    Response: DHS declines to adopt this commenter's recommendation. 
Under new 8 CFR 214.2(h)(8)(iii)(F)(4), an H-1B beneficiary must spend 
at least half of their work time performing job duties which directly 
further an activity that supports or advances one of the fundamental 
purposes, missions, objectives or functions of the qualifying 
institution, organization, or entity. The petitioner must demonstrate 
that the beneficiary's job duties directly further a purpose, mission, 
objective, or function related to higher education, nonprofit research, 
or government research, as applicable. Removing the language requested 
by the commenter (``namely, either higher education, nonprofit 
research, or government research'') would expand cap exemption 
eligibility too broadly and beyond congressional intent. INA sec. 
215(g)(5)(A)-(B) specifically requires that the beneficiary be employed 
at a qualifying institution of higher education or a related or 
affiliated nonprofit entity, a nonprofit research organization, or a 
governmental research organization; taking out the references to 
``higher education, nonprofit research, or government research'' from 8 
CFR 214.2(h)(8)(iii)(F)(4) would be inconsistent with the clear 
language of the statute. Congressional intent was to exempt from the H-
1B cap certain workers who could provide direct contributions to the 
United States through their work on behalf of institutions of higher 
education and related nonprofit entities, or nonprofit research 
organizations, or governmental research organizations.\75\ As noted in 
the NPRM, DHS is revising ``the'' to ``an'' to acknowledge that a 
qualifying organization may have more than one fundamental purpose, 
mission, objective, or function, and that this fact should not preclude 
an H-1B beneficiary from being exempt from the H-1B cap. 88 FR 72870, 
72884 (Oct. 23, 2023). If a beneficiary's job duties at the qualifying 
organization are unrelated to higher education, nonprofit research, or 
government research, they would not be

[[Page 103105]]

eligible for cap exemption under 8 CFR 214.2(h)(8)(iii)(F)(4).
---------------------------------------------------------------------------

    \75\ See USCIS, ``Guidance Regarding Eligibility for Exemption 
from the H-1B Cap Based on 103 of the American Competitiveness in 
the Twenty-First Century Act of 2000 (AC21)'' (Pub. L. 106-313) 
(June 6, 2006) (citing S. Rep. No. 106-260 (April 11, 2000)), 
https://www.uscis.gov/sites/default/files/document/memos/ac21c060606.pdf.
---------------------------------------------------------------------------

    Comment: An advocacy group recommended that the proposed text be 
supported with examples, including that a worker's duties further a 
fundamental objective of a qualifying institution if those duties 
pertain to their employer's role in a regional innovation effort that 
includes the qualifying institution, and that the text clarify that 
advancing regional innovation is a ``normal, primary, or essential 
purpose'' of any organization officially participating in a federally 
sponsored regional innovation initiative.
    Response: DHS declines to adopt this recommendation. If the 
beneficiary will not be directly employed by a qualifying institution, 
organization, or entity identified in INA section 214(g)(5)(A) or (B), 
to qualify for an exemption under such section they must spend at least 
half of their work time performing job duties at a qualifying 
institution, organization, or entity and those job duties must directly 
further an activity that supports or advances one of the fundamental 
purposes, missions, objectives, or functions of the qualifying 
institution, organization, or entity, namely, either higher education, 
nonprofit research, or government research. If a beneficiary meets the 
above requirements, they will be eligible for H-1B cap exemption under 
8 CFR 214.2(h)(8)(iii)(F)(4). DHS is unable to make a blanket 
determination that beneficiaries working as part of a regional 
innovation effort will meet the definitional requirements as requested 
by the commenter. USCIS adjudicators will continue to review each 
petition on a case-by-case basis to determine whether the beneficiary 
is eligible for cap exemption.
    Comment: A form letter campaign supported the proposed change, 
reasoning that the nexus requirement was burdensome and resulted in 
unnecessary RFEs. A joint submission also supported the proposal and 
stated that the current nexus requirement is unnecessary.
    Response: The revisions to 8 CFR 214.2(h)(8)(iii)(F)(4), as 
finalized by this rule, require the petitioner to establish that the 
beneficiary's duties further an activity that supports one of the 
fundamental purposes, missions, objectives, or functions of the 
qualifying entity, namely, either higher education, nonprofit research, 
or government research. DHS agrees this language renders the ``nexus'' 
requirement redundant and unnecessary.
    Comment: A professional association generally supported expanding 
recognition for telework, especially in the field of telehealth, in the 
proposed rule. The commenter recommended that USCIS expand 8 CFR 
214.2(h)(8)(iii)(F)(4) to explicitly provide for telehealth work. A 
form letter campaign, another commenter, and a joint submission also 
expressed support for recognizing telework and hybrid work arrangements 
under the proposed rule. An advocacy group and a joint submission 
supported the proposal and stated that H-1B regulations should focus on 
duties performed rather than location of work performed.
    Response: As stated in the NPRM, DHS is aware that many positions 
can be performed remotely. 88 FR 72870, 72884 (Oct. 23, 2023). However, 
DHS declines to expand 8 CFR 214.2(h)(8)(iii)(F)(4) to explicitly 
provide for telehealth. Before promulgation of this rule, 8 CFR 
214.2(h)(8)(iii)(F)(4) was silent on the matter of remote work 
arrangements. As proposed and finalized, 8 CFR 214.2(h)(8)(iii)(F)(4) 
states, ``When considering whether such a position is cap-exempt, the 
proper focus is on the job duties, rather than where the duties are 
performed.'' The regulation, as proposed and finalized, further states 
that work performed at the qualifying institution may include work 
performed in the United States, ``through telework, remote work, or 
other off-site work.'' This language sufficiently clarifies that the 
location where job duties are performed does not, on its own, determine 
cap-exempt status and would not, on its own, preclude telehealth. DHS 
reiterates that nothing in this rule changes DOL's administration and 
enforcement of statutory and regulatory requirements related to labor 
condition applications. See 8 U.S.C. 1182(n); 20 CFR part 655, subparts 
H and I. These requirements are unaffected by this rule and continue to 
apply to all H-1B employers. Additionally, nothing in this provision 
changes other statutory or regulatory requirements governing an 
occupation.
    Comment: A union opposed the proposed changes to 8 CFR 
214.2(h)(8)(iii)(F)(4) as a potential loophole that could allow abuse 
by private third-party employers, including staffing companies, through 
falsely claiming partnerships with school districts and higher 
education. The commenter also expressed concerns about a perceived 
``lower threshold for cap exemption under the proposed rule'' and 
stated that the facilitation of remote work for H-1B beneficiaries 
could be used to facilitate the offshore transfer of work. The 
commenter further stated that the proposal would create a loophole for 
beneficiaries in locations with low prevailing wages to perform work 
for an entity with an onsite location in a geographical area with 
higher prevailing wages.
    Response: DHS disagrees that the proposed change from ``the 
majority of'' to ``at least half'' will open a loophole for abuse by 
third-party employers. While changing the terminology may slightly 
expand who is eligible for the cap exemption, it will still require an 
employer to demonstrate that the beneficiary's duties ``directly 
further an activity that supports or advances one of the fundamental 
purposes, missions, objectives, or functions of the qualifying 
institution, organization, or entity, namely, either higher education, 
nonprofit research, or government research.'' New 8 CFR 
214.2(h)(8)(iii)(F)(4). This is still a meaningful limiting standard 
that not every third-party employer that simply places its employees 
``at'' a qualifying institution will be able to meet. Further, this 
provision does not expand or afford the cap exemption outside of 
congressional intent, but instead clarifies, simplifies, and modernizes 
eligibility for cap-exempt H-1B employment
    DHS also disagrees that this provision will be a potential loophole 
that will provide for lower wages and lead to outsourcing work 
overseas. The physical location where duties are performed is not 
determinative of H-1B cap exemption eligibility. However, this rule 
does not change the fact that the physical location where duties are 
performed is relevant for wage requirements, as governed by DOL 
regulations. DHS also disagrees that the clarification that work 
performed ``at'' a qualifying institution may include work performed in 
the United States through telework, remote work, or other off-site work 
will facilitate the offshore transfer of work. The commenter did not 
explain why it believed this to be the case, and DHS notes that there 
is nothing currently in the H-1B regulations prohibiting remote work. 
DHS also notes that the revised definition of ``United States 
employer,'' which requires the employer to have ``a bona fide job offer 
for the beneficiary to work within the United States, which may include 
telework, remote work, or other off-site work within the United 
States,'' may help to alleviate the commenter's concern. See new 8 CFR 
214.2(h)(4)(ii) (emphasis added).
    Comment: A commenter requested DHS to allow cap-exemption for 
beneficiaries who are conducting research in a for-profit institution 
but

[[Page 103106]]

have their salary mostly paid by projects funded by non-profit 
organizations.
    Response: DHS notes that a petitioner filing for a beneficiary as 
cap-exempt, where the beneficiary will not be directly employed by a 
qualifying institution, is required to establish that the beneficiary's 
duties will further an activity that supports or advances one of the 
fundamental purposes, missions, objectives, or functions of the 
qualifying entity. DHS declines to make any additional changes to the 
provision being finalized through this rulemaking. DHS places the focus 
on the work being performed by the beneficiary, rather than who pays 
the beneficiary for that work.
    Comment: Citing INA sec. 214(g)(5), a professional association 
asserted that both the current regulation and the proposed rule exceed 
statutory authority by distinguishing H-1B beneficiaries on the basis 
of their employment at qualifying entities or with other entities at 
the same workplace. The commenter stated that any H-1B beneficiary at 
an exempt workplace should be exempted from the H-1B cap, citing 
legislative history in support of their position. The commenter stated 
that USCIS should make no distinction between H-1B beneficiaries 
employed ``at'' or ``by'' a qualified entity. While initially proposing 
more limited revisions to 8 CFR 214.2(h)(8)(iii)(F)(4), the commenter 
then stated that 8 CFR 214.2(h)(8)(ii)(F)(4) should be rescinded in its 
entirety, stating the only regulatory standard required to implement 
the affiliation-based cap exemption provision of the statute is that 
found at 8 CFR 214.2(h)(8)(ii)(F)(2). The commenter also stated that it 
is imperative for qualifying physicians to be exempt from the H-1B cap, 
given the difficulties that arise in the employment of H-1B physicians 
due to differences in academic and DHS's fiscal year calendars.
    Response: DHS disagrees with the assertion that the current and 
final rules exceed statutory authority. DHS further notes that certain 
regulations cited by the commenter, namely 8 CFR 214.2(h)(8)(ii)(F)(4) 
and (2), do not exist; based on the context of the comment, DHS will 
assume the commenter is referring to Sec.  214.2(h)(8)(iii)(F)(4) and 
(2), respectively. The statute's reference to ``employed at'' is 
ambiguous, as it is not clear if ``at'' is meant to refer to a physical 
location or to the employer. Notably, this same ambiguity allows for 
DHS to provide for telework, remote work, and work at other off-site 
locations to be included in this final rule and for which the commenter 
expressed support. The longstanding regulation and the changes made by 
this final rule provide the best interpretation of an ambiguous statute 
and are consistent with the intent of Congress. If, as the commenter 
implies, the only determinative factor is the physical location of the 
work to be performed, that interpretation would be contrary to 
congressional intent because Congress intended to exempt foreign 
national workers who would directly contribute to the research or 
education missions of institutions of higher education or certain 
research organizations \76\ and, thus, would lead to anomalous results. 
For example, a business employing workers who will be physically 
located at a university or research organization that provides access 
to its facilities (e.g., a university that simply rents out office 
space on its campus), would qualify for cap exemption based on the 
commenter's interpretation, even if the work performed is independent 
of, and entirely unrelated to, the mission of the university or 
research organization. That would be inconsistent with congressional 
intent which is to provide cap exemption to certain H-1B beneficiaries 
``by virtue of what they are doing.'' \77\ Providing for cap exemption 
based solely on the location where the work is performed would also 
increase the risk of abuse.\78\
---------------------------------------------------------------------------

    \76\ See S. Rep. No. 106-260 (Apr. 11, 2000) (providing that 
individuals should be considered cap exempt because ``by virtue of 
what they are doing, people working in universities are necessarily 
immediately contributing to educating Americans'' and not simply 
referencing the identity of the petitioning employer or the physical 
location where the work is performed for purposes of permitting cap 
exemption).
    \77\ Id.
    \78\ See, e.g., U.S. Dep' of Justice, U.S. Attorney's Office, 
``Wright State University Agrees to Pay Government $1 Million for 
Visa Fraud'' (university agreed to use its cap exempt status to 
apply for H-1B visas for a privately held software company's 
employees, falsely claiming that these employees would physically 
work at the university's school campus), https://www.justice.gov/usao-sdoh/pr/wright-state-university-agrees-pay-government-1-million-visa-fraud.
---------------------------------------------------------------------------

    DHS acknowledges that the period of post-graduate employment for 
physicians generally does not align with DHS's fiscal year, under which 
periods of employment for cap-subject H-1B nonimmigrants fall. Such 
discrepancy between employment dates and the October 1 fiscal year 
start date may occur for other occupations or employers as well. 
However, DHS declines to rescind current 8 CFR 214.2(h)(8)(iii)(F)(4) 
or to revise it in a manner other than that proposed in the NPRM. The 
regulations allowing for H-1B cap exemption, as proposed in the NPRM 
and finalized in this rule, strike a necessary balance between 
providing flexibility to petitioners and beneficiaries and ensuring 
that Congress' aims in exempting certain workers from the H-1B cap 
based on their contributions at qualifying institutions, organizations 
or entities are not undercut by employment that is peripheral to those 
contributions.
    Comment: A joint submission provided strong support for this 
provision, specifically in relation to start-up and entrepreneurships, 
noting the ``major difficulties'' with the current structure and 
process for both immigrant entrepreneurs and key hires, particularly 
involving the inability to definitively rely on being selected for the 
H-1B lottery. The joint submission also notes how ``the cap-exempt visa 
pathway has emerged as a critical channel for immigrant entrepreneurs 
to grow their business[es] in the U.S., boosting new business 
formation, attracting venture capital, and driving American job 
creation.'' The submission also stated that USCIS should support and 
encourage use of H-1B cap exemption by codifying best-practices for 
individuals to pursue entrepreneurial or otherwise economically 
valuable activity, stating that the standard usage of cap-exemption to 
promote entrepreneurship involves a cap-exempt entity sponsoring an 
initial, primary petition and a beneficiary-owner sponsoring a 
secondary petition in relation to a startup.
    Response: DHS appreciates the support expressed by the commenters 
and agrees the provision provides flexibility and clarity, including 
for beneficiary-owners who are also affiliated with a qualifying 
organization. DHS declines to codify in this rule best practices for 
entrepreneurs seeking H-1B cap exemption as requested by the commenter. 
Current 8 CFR 214.2(h)(8)(iii)(F)(6) details the parameters under which 
an H-1B beneficiary may be exempt from the cap if they are concurrently 
employed by a cap-exempt and a nonexempt employer. Specifically, when 
petitioning for concurrent cap-subject H-1B employment, the petitioner 
must demonstrate that the H-1B beneficiary is employed in valid H-1B 
status under a cap exemption under INA section 214(g)(5)(A) or (B), the 
beneficiary's employment with the cap-exempt employer is expected to 
continue after the new cap-subject petition is approved, and the 
beneficiary can reasonably and concurrently perform the work described 
in each employer's respective positions. If the cap-exempt employment 
ends, the individual becomes cap-subject unless previously

[[Page 103107]]

counted. The parameters and requirements relating to concurrent 
employment with a cap-exempt and nonexempt employer outlined in 8 CFR 
214.2(h)(8)(iii)(F)(6) apply to all H-1B petitioners and beneficiaries, 
including entrepreneurs. Furthermore, regulatory codification of best 
practices is not appropriate because employment scenarios include 
unique, specific fact patterns and must be addressed on a case-by-case 
basis. Petitioners bear the burden to establish eligibility for the 
requested classification, to include eligibility for cap exemption and 
beneficiary ownership.
    Comment: A joint submission and a law firm expressed general 
support for the proposed ``nonprofit research organization'' and 
``governmental research organization'' definitions as providing clarity 
in current regulations and to create more flexibility for the 
beneficiaries and entities affected by the revision. A couple of 
advocacy groups, trade associations, and other commenters supported 
exempting higher education, nonprofit, and government research 
organizations from annual numerical limits on H-1B availability. A 
professional association and a company wrote that the proposed 
definitions would diversify international postdoctoral graduates' 
available career paths.
    Response: DHS appreciates these comments and agrees that revising 
the definitions of nonprofit entity, nonprofit research organization, 
and government research organization will increase clarity and 
flexibility for a variety of petitioners and beneficiaries.
    Comment: An advocacy group cited 8 U.S.C. 1184(g)(5)(B) in stating 
that the proposed definition for nonprofit research organizations would 
bring H-1B regulations into alignment with congressional intent.
    Response: DHS agrees that the new definition for nonprofit research 
organizations better aligns with congressional intent. DHS recognizes 
that Congress chose to exempt from the numerical limitations in INA 
section 214(g)(1) beneficiaries who are employed ``at'' a qualifying 
institution, which is a broader category than beneficiaries employed 
``by'' a qualifying institution. Congressional intent was to exempt 
from the H-1B cap certain nonimmigrant workers who could provide direct 
contributions to the United States through their work on behalf of 
institutions of higher education and related nonprofit entities, 
nonprofit research organizations, or governmental research 
organizations. In effect, this statutory measure ensures that 
qualifying institutions have access to a continuous supply of H-1B 
workers without numerical limitation.\79\ The definitional changes 
finalized in this rule increase flexibility and clarity to better meet 
this intent.
---------------------------------------------------------------------------

    \79\ See USCIS, ``Guidance Regarding Eligibility for Exemption 
from the H-1B Cap Based on 103 of the American Competitiveness in 
the Twenty-First Century Act of 2000 (AC21)'' (Pub. L. 106-313) 
(June 6, 2006) (citing S. Rep. No. 106-260 (April 11, 2000)), 
https://www.uscis.gov/sites/default/files/document/memos/ac21c060606.pdf.
---------------------------------------------------------------------------

    Comment: Many commenters generally expressed support for the 
proposal to replace the language ``primarily engaged in basic research 
and/or applied research'' with ``a fundamental activity of'' basic 
research and/or applied research at 8 CFR 214.2(h)(19)(iii)(C). A 
professional association agreed and stated that the proposed change is 
consistent with congressional intent ``to help keep top graduates and 
educators in the country.'' A joint submission wrote that the proposed 
language would align regulations with the standard found for formal 
written affiliation agreements and reduce confusion. A local government 
agency supported the proposed change and expressed its understanding 
that a petitioner need not be ``directly and primarily'' engaged in 
research and that petitioners would no longer need to prove the 
percentage of their staff or budget dedicated to research but would 
need to demonstrate instead that research is a ``principal activity'' 
of the petitioner. A commenter agreed that the proposal furthers 
congressional intent behind the H-1B program by focusing on actual work 
performed and contributing to the education of Americans. An individual 
commenter supported the proposal and wrote that the ``fundamental 
activity'' language is sufficiently protective of the program. An 
advocacy group expressed support for USCIS' proposed revision as a way 
to address this issue and improve regulatory uniformity.
    Response: DHS agrees that this proposed change will provide more 
clarity, uniformity, and flexibility for those who will not be directly 
employed by a qualifying institution, organization, or entity. As noted 
in the NPRM, the ``fundamental activity'' standard for formal written 
affiliation agreements was codified in DHS regulations at current 8 CFR 
214.2(h)(8)(iii)(F)(2)(iv) and (h)(19)(iii)(B)(4) through a final rule 
published in 2016, and DHS believes that the changes to new 8 CFR 
214.2(h)(19)(iii)(C) to align the standards will enhance clarity.\80\ 
In addition, in the NPRM DHS acknowledged that it was making changes to 
8 CFR 214.2(h)(19)(iii)(C) to effectuate the desired policy with 
respect to the H-1B cap exemption. 88 FR 72870, 72885-72886 (Oct. 23, 
2023). Because the cap exemption provision in 8 CFR 
214.2(h)(8)(F)(2)(iv) cross references the H-1B ACWIA fee exemption in 
8 CFR 214.2(h)(19)(iii)(C) for the definitions of nonprofit research 
organization and governmental research organization, the definitional 
changes were made there. The regulatory parity between the definitional 
standards for the H-1B cap exemption and the H-1B ACWIA fee exemption 
has been in place since 2016 when DHS first codified its interpretation 
of AC21 amendments establishing the H-1B cap exemption for certain 
entities, including nonprofit research organizations and governmental 
research organizations, and, as proposed, DHS is continuing that parity 
with the changes made in this final rule.\81\
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    \80\ DHS recognizes that the definition of ``nonprofit research 
organization or government research organization'' at new 8 CFR 
214.2(h)(19)(iii)(C) differs from DOL's definition of ``nonprofit 
research organization or governmental research organization'' at 20 
CFR 656.40(e)(1)(iii). However, DHS definitions are separate from, 
and generally serve different purposes than, DOL definitions. 
Specifically, the DHS definition of ``nonprofit research 
organization or government research organization'' at new 8 CFR 
214.2(h)(19)(iii)(C) is used to determine whether an H-1B petitioner 
is exempt from the H-1B cap under INA 214(g)(5)(B), 8 U.S.C. 
1184(g)(5)(B), and from paying the ACWIA fee under INA 214(c)(9)(A), 
8 U.S.C. 1184(c)(9)(A). In contrast, the DOL definition of 
``nonprofit research organization or government research 
organization'' at 20 CFR 656.40(e) is used for prevailing wage 
determinations under INA 212(p)(1)(B), 8 U.S.C. 1182(p)(1)(B). See 
also 20 CFR 655.731(a)(2)(vii) (cross-referencing definition at 20 
CFR 656.40(e) for purposes of H-1B LCAs).
    \81\ See 80 FR 81900, 81919 (Dec. 31, 2015) (proposing to 
conform DHS regulations to the then-existing policy pertaining to 
the definitions of several terms in INA section 214(g)(5) and the 
applicability of those terms to the ACWIA fee exemption provisions 
and the AC21 cap exemption provisions). The cross reference between 
the provisions was codified in the final rule. See 81 FR 82398, 
82486 (Nov. 18, 2016). The provision codified at 8 CFR 
214.2(h)(8)(ii)(F) was subsequently redesignated as 8 CFR 
214.2(h)(8)(iii)(F). See 84 FR 888, 954 (Jan. 31, 2019). Note, 
however, that the policy of extending the definitions from the ACWIA 
fee context to the H-1B cap exemption context predates the 
codification of that policy. See Mem. from Michael Aytes, Assoc. 
Dir. for Domestic Ops., USCIS, Guidance Regarding Eligibility for 
Exemption from the H-1B Cap Based on section 103 of the American 
Competitiveness in the Twenty-First Century Act of 2000 (AC21) 
(Public Law 106-313) (June 6, 2006); https://www.uscis.gov/sites/default/files/document/memos/ac21c060606.pdf.
---------------------------------------------------------------------------

    Comment: A company recommended that USCIS provide further guidance 
to define ``fundamental activity,'' stating that doing so would support 
industry reliance on the new definition and provided several suggested 
examples. The commenter noted that DHS offers ``some'' guidance in the 
present

[[Page 103108]]

rulemaking by stating that ``a fundamental activity would still have to 
be an important and substantial activity, although it need not be the 
organization's principal or foremost activity under the current 
`primary' construct.'' The commenter also asked DHS to include examples 
where the application of the proposed standard would be less clear, 
stating there is a lack of guidance on the application of the standard 
that would help to ensure consistency while contributing to economic 
growth and development within this important segment of the Unites 
States economy.
    Response: As noted by the commenter and stated in the NPRM, a 
``fundamental activity'' is ``an important and substantial activity, 
although it need not be the organization's principal or foremost 
activity.'' 88 FR 72870, 72885 (Oct. 23, 2023). While this change may 
somewhat expand who is eligible for a cap exemption, DHS does not 
expect or intend this to be a significant change for petitioners. 
Similar to how a petitioner may have demonstrated that it was primarily 
engaged in research under the prior standard, a petitioner may 
demonstrate that research is one of its fundamental activities by 
showing that research constitutes an important and significant activity 
within the context of its overall operations. The types of evidence 
that may be probative generally remain the same. For example, probative 
evidence may include the petitioner's mission statement, descriptions 
of the petitioner's research efforts and ongoing research projects, the 
petitioner's operating budget dedicated to research as evidenced by 
relevant tax forms, and staffing descriptions that indicate the level 
of staffing dedicated to research. However, unlike the prior 
``primarily'' standard, a petitioner no longer needs to demonstrate 
that research is the principal or foremost activity, i.e., that 
research constitutes more than 50% of its operations compared to all 
its other activities.\82\ While there is not an exact minimum 
percentage that would always be required to meet the ``fundamental 
activity'' standard, it remains the petitioner's burden to establish 
eligibility for cap exemption. USCIS adjudicates each petition on a 
case-by-case basis, taking into consideration the totality of the 
facts.
---------------------------------------------------------------------------

    \82\ Cf. Open Soc'y Inst. v. USCIS, 573 F. Supp. 3d 294, 305 
(D.D.C. 2021) (``Based on the totality of evidence in the record, 
and considering its research activities in proportion to its other 
activities, we conclude that the record does not demonstrate that 
[Open Society] is directly and principally engaged in research. The 
research conducted by [Open Society] is incidental, or, at best, 
secondary to its principal activities. . . .''), dismissed No. 21-
5251, 2022 WL 4002149 (D.C. Cir. Aug. 29, 2022) (per curiam).
---------------------------------------------------------------------------

    DHS does not believe that it is necessary to provide additional 
guidance through this rulemaking but may consider providing additional 
guidance in the future through other means such as the USCIS Policy 
Manual. DHS declines to provide specific guidance on the examples 
provided by the commenter because those examples, without further 
context, could support a decision either in favor of or against 
granting a cap exemption. For example, ``a company that is at the 
outset of starting a research department'' may or may not qualify for 
cap exemption depending on all the relevant facts, such as how much of 
its resources (including time, money, and personnel) it dedicates to 
such research. Similarly, ``a company that pauses its research for a 
period of time and then resumes its research activities'' may or may 
not qualify depending on all the relevant facts, such as the length of 
pause and the resources dedicated to the resumption of its research 
activities.\83\ As USCIS adjudicates each petition on a case-by-case 
basis, taking into consideration the totality of the facts, USCIS is 
not providing additional guidance or examples in response to this 
comment.
---------------------------------------------------------------------------

    \83\ In both of these examples, the company, as with any other 
petitioner, would also have to demonstrate it meets all other 
eligibility requirements, including having a bona fide job offer for 
the beneficiary and meeting the definition of a nonprofit research 
organization.
---------------------------------------------------------------------------

    Comment: An advocacy group supported the proposed definition but 
recommended that USCIS clarify that government-chartered nonprofits 
involved in research through regional hubs qualify as nonprofit 
research organizations, stating that ``organizations that work on later 
stages of technology development should be able to qualify as research 
organizations.'' The advocacy group commented that a ``key goal of the 
regional hubs is the commercialization of its earlier stage research,'' 
and that a ``majority of technologies developed through basic and 
applied research fail to reach commercialization and subsequently 
benefit U.S. citizens.'' The advocacy group recommended that USCIS 
define research organizations to include nonprofits and government 
entities that conduct research as part of their role in a regional hub.
    Response: DHS reiterates its goal of slightly modifying the 
definition of employers who are exempt from the H-1B cap in order to 
provide additional clarity and flexibility for these types of cap 
exemptions. Changing the definition of ``nonprofit research 
organization'' and ``governmental research organization'' by replacing 
``primarily engaged'' and ``primary mission'' with ``fundamental 
activity'' provides potential exemption from the H-1B cap for a 
nonprofit entity or governmental research organization that conducts 
research as a fundamental activity but is not primarily engaged in 
research or where research is not the primary mission. This will create 
more flexibility for nonprofit and governmental research organizations 
and for beneficiaries who are not directly employed by a qualifying 
organization. There is nothing in this final rule that will preclude 
nonprofits and government entities that conduct research as part of 
their role in a regional hub from potentially qualifying for cap-
exemption. However, it remains the petitioner's burden to demonstrate 
eligibility for the benefit sought.\84\ Therefore, DHS declines to 
further define research organization or otherwise modify the definition 
in this rule.
---------------------------------------------------------------------------

    \84\ See INA section 291, 8 U.S.C. 1361; Matter of Simeio 
Solutions, LLC, 26 I&N Dec. 542, 549 (AAO 2015) (``It is the 
petitioner's burden to establish eligibility for the immigration 
benefit sought.''); Matter of Skirball Cultural Center, 25 I&N Dec. 
799, 806 (AAO 2012) (``In visa petition proceedings, the burden of 
proving eligibility for the benefit sought remains entirely with the 
petitioner.'')
---------------------------------------------------------------------------

    Comment: An advocacy group recommended that the proposed 
regulations explicitly state that a ``nonprofit research organization 
or governmental research organization or educational or government 
organization may perform or promote more than one fundamental 
activity.''
    Response: DHS declines to adopt this suggestion. Under this rule, 
the definition of a nonprofit research organization or government 
research organization at new 8 CFR 214.2(h)(19)(iii)(C) states that 
``[a] nonprofit research organization or governmental research 
organization may perform or promote more than one fundamental 
activity.'' DHS declines to expand this definition to also include 
reference to educational or government organizations. This provision 
applies explicitly to nonprofit research organizations and governmental 
research organizations. DHS also notes that new 8 CFR 
214.2(h)(8)(iii)(F)(2)(iv), pertaining to affiliation agreements 
between nonprofit entities and institutions of higher education, and 
new 8 CFR 214.2(h)(19)(iii)(B)(4), pertaining to exemption from the 
American Competitiveness and Workforce Improvement Act (ACWIA) fee 
referenced in 8 CFR 106.2 for

[[Page 103109]]

nonprofit entities related to or affiliated with an institution of 
higher education, are revised to include a statement that, ``[a] 
nonprofit entity may engage in more than one fundamental activity.'' 
Nothing in this rule precludes an educational or government 
organization from qualifying as an affiliated or related non-profit 
under 8 CFR 214.2(h)(8)(iii)(F)(2), nor under any of the other cap 
exemptions at 8 CFR 214.2(h)(8)(iii)(F). Finally, at new 8 CFR 
214.2(h)(8)(iii)(F)(4), addressing H-1B beneficiaries not directly 
employed by a qualifying institution, organization, or entity, DHS 
removed the requirement that a beneficiary's duties ``directly and 
predominately further the essential purpose, mission, objectives or 
functions'' of the qualifying institution, organization, or entity and 
replaced it with the requirement that the beneficiary's duties 
``directly further an activity that supports or advances one of the 
fundamental purposes, missions, objectives, or functions'' of the 
qualifying institution, organization, or entity. These revisions 
sufficiently acknowledge the potential for more than one fundamental 
activity, where applicable, of institutions, organizations, and 
entities relevant to cap exemption determinations.
    Comment: A union opposed the proposed changes to 8 CFR 
214.2(h)(19)(iii)(C) as opening a loophole for nonprofit and government 
employers not engaged in research to qualify for a cap exemption by 
claiming a ``secondary interest in research to qualify as a cap exempt 
entity.'' The commenter further stated that ``[t]he lower threshold for 
cap exemption under the proposed rule would create an incentive for 
nonprofits and government employers to restructure or reconfigure their 
operations to qualify for cap exemption.''
    Response: DHS disagrees that the proposed change from ``primarily 
engaged'' and ``primary mission'' to ``a fundamental activity of'' in 8 
CFR 214.2(h)(19)(iii)(C) will open a loophole for nonprofit and 
government employers not engaged in research to qualify for a cap 
exemption. While changing the terminology may slightly expand who is 
eligible for the cap exemption, it would still require that an employer 
demonstrate that research is a ``fundamental activity,'' which is a 
meaningful limiting standard. A fundamental activity would still have 
to be an important and substantial activity, although it need not be 
the organization's principal or foremost activity as required under the 
current ``primary'' construct.\85\ Therefore, nonprofit and government 
employers not engaged in research would still not qualify.
---------------------------------------------------------------------------

    \85\ Multiple comments leading to the 2016 final rule also 
expressed concern that the ``primary purpose'' requirement was too 
restrictive, although in the context of 8 CFR 
214.2(h)(8)(ii)(F)(2)(iv) and (h)(19)(iii)(B)(4). 81 FR 82403.
---------------------------------------------------------------------------

    Comment: A research organization commented that the proposal to 
qualify an organization as cap-exempt if one of its many ``fundamental 
activities'' is research ``is so expansive that virtually any nonprofit 
organization will become newly eligible for cap-exemption.'' The 
commenter stated that USCIS has not clearly defined ``research'' or 
``fundamental activity'' and has no expertise in doing so, contrasting 
that against the ``primarily'' standard as applied by the National 
Science Foundation. The commenter stated that DHS provides ``no 
substantive rationale'' for the changes, citing the text from the NPRM 
as failing to meaningfully explain the revisions and failing to provide 
a ``bright-line criteria to identify eligibility.'' The commenter said 
that the changes would create an adjudication and litigation nightmare 
for DHS due to lawsuits from denials of cap-exempt claims. The 
commenter also cited statistics demonstrating the increase in cap-
exempt petitions and stated that DHS has not adequately shown a 
compelling reason to expand those numbers further. The commenter 
requested that DHS provide the public with a detailed analysis of how 
the changes would impact the H-1B program and the scale of those 
impacts at the NPRM stage.
    Response: DHS disagrees that the result of this change will 
effectively qualify any nonprofit entity as eligible for H-1B cap 
exemption. The change to 8 CFR 214.2(h)(19)(iii)(C), as proposed and 
finalized, requires establishing that research is one of the 
fundamental activities of the nonprofit research organization or 
government research organization. Not every activity an organization 
engages in would be considered a ``fundamental activity.'' A 
fundamental activity would still have to be an important and 
substantial activity, although it need not be the organization's 
principal or foremost activity. DHS disagrees with the commenter that 
virtually any nonprofit claiming to engage in an activity that it 
labels or considers as ``research'' would be eligible for cap 
exemption. Such a nonprofit would still have to show that research is 
one of its fundamental activities. Moreover, the nonprofit must show 
that the research being conducted meets the definition of ``basic 
research'' and/or ``applied research'' under 8 CFR 
214.2(h)(19)(iii)(C). This is another meaningful limitation against a 
nonprofit simply claiming to engage in some activity that it labels as 
``research.'' Regarding the comment that DHS did not define the terms 
``research'' or ``fundamental activity,'' DHS disagrees and notes that 
it is revising existing definitions of ``basic research'' as well as 
``applied research'' at 8 CFR 214.2(h)(19)(iii)(C).
    Regarding the concern that the rule does not provide ``bright-line 
criteria to identify eligibility,'' it is not appropriate to provide 
``bright-line criteria'' because research activities and employment 
scenarios include unique, specific fact patterns and must be addressed 
on a case-by-case basis. Petitioners bear the burden to establish 
eligibility for the requested classification, to include eligibility 
for cap exemption.
    Regarding the comment requesting that DHS provide the public with a 
detailed analysis of how the changes would impact the H-1B program, the 
NPRM generally projected a small increase in the population of 
petitioners eligible for cap exemption but could not precisely estimate 
how many additional petitioners would now qualify for cap exemption. 
See 88 FR 72934, 72915 (Table 12. Summary of Provisions and Impacts of 
the Proposed Rule). Evaluating such impact with specificity is not 
practically feasible.
    With respect to the comment that DHS provided no substantive 
rationale for the changes, DHS disagrees. As explained in the NPRM, 
changing the regulatory definition to ``fundamental activity'' provides 
for a reorientation of cap exemptions for nonprofit research 
organizations and governmental research organizations aligning with 
current ``fundamental activity'' standard found for formal written 
affiliation agreements under 8 CFR 214.2(h)(8)(iii)(F)(2)(iv) and 
(h)(19)(iii)(B)(4), which would bring more clarity and predictability 
to decision-making, for both adjudicators and the regulated community. 
88 FR 72870, 72884 (Oct. 23, 2023).
    Comment: A joint submission expressed general support for the 
proposed revision at 8 CFR 214.2(h)(19)(iii)(C). An advocacy group 
encouraged DHS to ``finalize its proposal insofar as it will again 
count indirect research as among the [qualifying] research 
activities,'' describing activities such as funding and monitoring the 
research of others as activities that would fall under ``indirect 
research.'' The group said that the provision acknowledges the full 
breadth of nonprofit ``research,'' thereby

[[Page 103110]]

providing additional flexibility and reducing burdens for nonprofit 
employers seeking cap exemption. Another advocacy group supported the 
proposed changes and recommended that ``qualifying research includes 
not only basic and applied research but can also include later stages 
of research, such as technology development and transfer.''
    Response: DHS generally agrees with the commenter that the revised 
requirements to qualify for H-1B cap exemption will provide petitioners 
seeking cap exemption additional clarity and flexibility. However, DHS 
does not agree with further broadening or changing the proposed 
parameters for qualifying activities, as the commenters suggested. DHS 
also does not agree with the commenter's characterization of the 
proposed changes as allowing ``indirect research.'' In this response, 
DHS clarifies that the definition at 8 CFR 214.2(h)(19)(iii)(C), as 
proposed and finalized, does not allow for ``indirect research'' in the 
sense of allowing cap exemption for a nonprofit organization that 
merely funds and monitors the research of others but does not itself 
directly conduct any research. DHS reiterates that 8 CFR 
214.2(h)(19)(iii)(C) requires the nonprofit organization to engage in 
research. Further, 8 CFR 214.2(h)(19)(iii)(C) states that ``basic 
research and applied research . . . may include designing, analyzing, 
and directing the research of others if on an ongoing basis and 
throughout the research cycle.'' While funding and monitoring the 
research of others may fall under this provision, the petitioner must 
also direct such research on an ongoing basis throughout the research 
cycle. In other words, this language is meant to allow the petitioning 
entity to qualify for cap exemption only if the petitioner takes an 
active, consistent role in designing, analyzing, and directing the 
research of others. Simply providing some funds and sporadically 
monitoring the research of others, without more, would not be 
sufficient to meet new 8 CFR 214.2(h)(19)(iii)(C). Such a low standard 
could open a loophole for nonprofit and government employers not 
engaged in research or lead to abuse by third-party employers seeking 
to qualify for a cap exemption simply by giving funds to a qualifying 
non-profit.
    Similarly, DHS declines to state in new 8 CFR 214.2(h)(19)(iii)(C) 
that ``qualifying research includes not only basic and applied research 
but can also include later stages of research, such as technology 
development and transfer.'' The phrase ``technology development and 
transfer'' is undefined and, without additional specificity, could open 
a loophole for nonprofit and government employers not engaged in 
research or lead to abuse by third-party employers seeking to qualify 
for a cap exemption simply by claiming to be developing and 
transferring someone else's research. Thus, DHS declines to 
specifically include reference to indirect research or technology 
development and transfer in the regulatory text.
    Comment: An attorney writing as part of a form letter campaign 
supported the proposal to forego the requirement at 8 CFR 
214.2(h)(19)(iv)(B) that tax-exempt organizations have an IRS document 
evidencing nonprofit status to also state whether the organization is 
primarily an educational or research organization. A law firm agreed 
that this proposal would align with the changes to research being a 
``fundamental activity'' of the qualifying organization or entity. A 
local government agency also supported this proposal, reasoning that 
some tax-exempt organizations are created through statute and thus may 
lack IRS documentation. An advocacy group also supported the proposal, 
stating that DHS adjudicators have, in the past, made erroneous 
inquiries and denials based on the activities of the commenter as 
indicated in its tax forms.
    Response: DHS agrees that amending the definition of ``nonprofit or 
tax-exempt organization'' to no longer require that the petitioner 
provide evidence of its approval by the IRS as a tax-exempt 
organization for research or educational purposes will help simplify 
and clarify the process for adjudicators and for stakeholders. DHS is 
not proposing to eliminate or otherwise change the overarching 
requirement that a qualifying nonprofit or tax-exempt petitioner be an 
institution of higher education or a related or affiliated nonprofit 
entity, or a nonprofit research organization or a governmental research 
organization institution, as required by the statute and regulations. A 
petitioner will still need to submit documentation to demonstrate that 
it is a nonprofit or tax-exempt organization, such as tax returns, tax 
exemption certificates, references to the organization's listing in the 
IRS's most recent list of tax-exempt organizations, articles of 
incorporation, bylaws, or other similar documentation. Through this 
rule, DHS is merely clarifying that such documentation does need not to 
be in the form of an IRS letter.
    Comment: An association of local governmental agencies and an 
additional local government agency commented that the American 
Competitiveness Act in the Twenty-First Century did not distinguish 
types of nonprofit entities. The commenters wrote that the proposal at 
8 CFR 214.2(h)(19)(iv) exceeds statutory authority by excluding some 
nonprofit organizations from qualifying for cap exemption and 
recommended removing references to sections 501(c)(3), (c)(4), and 
(c)(6) of the Internal Revenue Code (IRC) to avoid this issue.
    Similarly, a professional association commented that distinguishing 
nonprofit entities affiliated with an institution of higher education 
under section 501(c)(3), (c)(4), or (c)(6) of the IRC lacks statutory 
support and recommended that the proposal at 8 CFR 214.2(h)(19)(iv) 
include, but not limit, tax-exempt organizations to those defined in 
the cited sections 501(c)(3), (c)(4), and (c)(6).
    Response: DHS did not propose to substantively change the 
longstanding requirement at current 8 CFR 214.2(h)(19)(iv) that the 
nonprofit be defined as a tax-exempt organization under section 
501(c)(3), (c)(4) or (c)(6) of the IRC.\86\ As explained in the H-1B 
NPRM, 8 CFR 214.2(h)(19)(iv) ``would more simply state that a nonprofit 
organization or entity `must be determined by the Internal Revenue 
Service [to be] a tax-exempt organization under the Internal Revenue 
Code of 1986, section 501(c)(3) (c)(4), or (c)(6), 26 U.S.C. 501(c)(3), 
(c)(4), or (c)(6).' ''
---------------------------------------------------------------------------

    \86\ See ``Petitioning Requirements for the H-1B Nonimmigrant 
Classification Under Public Law 105-277,'' 63 FR 65657, 65658 (Nov. 
30, 1998) (interim final rule with request for comments) (codifying 
paragraph (h)(19)(iv) requiring a nonprofit organization or entity 
to be qualified as a tax exempt organization under section 
501(c)(3), (c)(4), or (c)(6) of the Internal Revenue Code); 
``Petitioning Requirements for the H-1B Nonimmigrant Classification 
Under Public Law 105-277,'' 65 FR 10678, 10679 (Feb. 29, 2000) 
(final rule) (declining a suggestion to allow organizations that are 
tax exempt under state or local law to qualify as non-profit 
organizations for the purposes of the ACWIA, and declining another 
suggestion to expand the definition of the organizations considered 
to be nonprofit to include all non-profit organizations (not just 
non-profit research organizations), on the basis that there is no 
legislative support for either suggestion).
---------------------------------------------------------------------------

    DHS disagrees that this longstanding requirement is contrary to 
law. Rather, INA sec. 214(g)(5)(A) clearly limits eligibility to those 
nonprofit organizations that are ``affiliated'' with an institution of 
higher education and INA 214(g)(5)(B) limits eligibility to a 
``nonprofit research organization.'' The limitations at paragraph 
(h)(19)(iv) relating to tax-exempt organizations under 501(c)(3), 
(c)(4), and (c)(6) are consistent with INA 214(g)(5)(A) and (B), and 
further promotes the INA's goals of improving economic growth and job 
creation by facilitating U.S.

[[Page 103111]]

employers' access to high-skilled workers, particularly at these 
institutions, organizations, and entities.\87\ DHS will finalize 8 CFR 
214.2(h)(19)(iv) as proposed.
---------------------------------------------------------------------------

    \87\ See S. Rep. No. 106-260 (April 11, 2000) (AC21 sought to 
help the American economy by, in part, exempting from the H-1B cap 
``visas obtained by universities, research facilities, and those 
obtained on behalf of graduate degree recipients to help keep top 
graduates and educators in the country''); see also ``Retention of 
EB-1, EB-2, and EB-3 Immigrant Workers and Program Improvements 
Affecting High-Skilled Nonimmigrant Workers,'' 81 FR 82398, 82447 
(Nov. 18, 2016) (stating that DHS's policy of allowing cap exemption 
for individuals employed `at' and not simply employed `by' a 
qualifying institution ``is consistent with the language of the 
statute and furthers the goals of AC21 to improve economic growth 
and job creation by immediately increasing U.S. access to high-
skilled workers . . . .'').
---------------------------------------------------------------------------

    Comment: A joint submission recommended that the proposal at 8 CFR 
214.2(h)(19)(iv) clarify that ``[a]n organization with its own tax 
filing and payroll can qualify for cap-exemption even if it is part of 
a larger nonprofit and uses the parent nonprofit's Federal employer 
identification number (FEIN)'' and that ``[a] nonprofit that engages a 
Professional Employer Organization (PEO) for human resource and payroll 
services may still qualify for cap-exemption even if the taxpayer 
identification number of the PEO is used for those functions.''
    Response: DHS declines to add the requested language to this 
provision. A non-profit organization may be exempt from the cap if it 
is determined by the Internal Revenue Service as a tax-exempt 
organization under the Internal Revenue Code of 1986, section 
501(c)(3), (c)(4), or (c)(6), 26 U.S.C. 501(c)(3), (c)(4), or (c)(6), 
thereby meeting the definition of a nonprofit organization or entity as 
codified at new 8 CFR 214.2(h)(19)(iv), or if it is primarily engaged 
in basic research and/or applied research, thereby meeting the 
definition of a nonprofit research organization as codified at new 8 
CFR 214.2(h)(19)(iii)(C). USCIS cannot make a generalized assessment as 
to whether a particular organization or entity will qualify for cap-
exempt status. However, as USCIS has previously noted,\88\ use of a PEO 
will not, standing alone, negate an employer's cap-exempt 
qualification. USCIS will consider all relevant factors and review the 
totality of the evidence for each petition using the preponderance of 
the evidence standard to determine cap-exempt status.
---------------------------------------------------------------------------

    \88\ USCIS, Electronic Reading Room, H-1B Cap Exemptions--Baker 
(Oct. 18, 2023), https://www.uscis.gov/sites/default/files/document/foia/H-1BCapExemptions-Baker.pdf.
---------------------------------------------------------------------------

    Comment: A trade association and a local government agency 
suggested that USCIS clarify when State and local governments can be 
qualifying tax-exempt organizations. Specifically, the trade 
association suggested that USCIS clarify that tax-exempt organizations 
that can create qualifying affiliations with universities include state 
and local governmental and quasi-governmental entities. The local 
government agency suggested that 8 CFR 214.2(h)(19)(iv) be revised to 
directly reference tax-exempt government entities.
    Other commenters voiced concern that the proposed revision would 
exclude an entire class of entities that currently meet the current 
definition of ``non-profit entity'' but would not meet the definition 
in the proposed regulation change. One of these commenters said that 
the current definition of ``non-profit entities'' has two parts--first 
that the nonprofit organization or entity is ``defined'' as a tax-
exempt organization under IRC 501(c)(3), (c)(4), and (c)(6), and second 
that the nonprofit has been ``approved'' as a tax-exempt organization 
for research or educational purposes--whereas the proposed regulation 
change requires that the nonprofit organization or entity ``must be 
determined by the Internal Revenue Service'' as a tax-exempt 
organization under IRC 501(c)(3), (c)(4), and (c)(6). This commenter 
stated that governmental units, such as local and State governments, 
are exempt from income taxation under IRC section 115, but would not be 
classified as tax-exempt organizations in the proposed rule and 
requested that they be provided for as cap-exempt entities. The 
commenter provided an example of a private religious school being cap-
exempt under the proposed rule where a public school would not. The 
commenter said that since the H-1B cap exemption requirements mirror 
the requirements under the ACWIA, related to exemption of the ACWIA fee 
for H-1B employers, the proposed rule should be modified to include 
public primary and secondary schools, since nonprofit private primary 
and secondary schools would already be covered under the IRC 501(c)(3), 
(c)(4), and (c)(6) requirement.
    Response: State and local governments that currently qualify as 
nonprofit or tax-exempt organizations under 8 CFR 214.2(h)(19)(iv) 
should generally continue to qualify as tax-exempt organizations under 
new 8 CFR 214.2(h)(19)(iv). In proposing to revise 8 CFR 
214.2(h)(19)(iv), DHS's intention was simply to remove the unduly 
burdensome requirement under 8 CFR 214.2(h)(19)(iv)(B) that the IRS 
letter itself state that the petitioner's approval as a tax-exempt 
organization was ``for research or educational purposes.'' 88 FR 72886 
(Oct. 23, 2023). It was never DHS's intention to restrict, much less 
eliminate, eligibility for state and local governments that currently 
qualify as nonprofit or tax-exempt organizations under 8 CFR 
214.2(h)(19)(iv). DHS did not propose to eliminate or otherwise change 
the other requirements under 8 CFR 214.2(h)(19)(iv). As with current 8 
CFR 214.2(h)(19)(iv)(A), new 8 CFR 214.2(h)(19)(iv) will continue to 
define nonprofit or tax-exempt organizations based on the Internal 
Revenue Service's definition of a tax-exempt organization under the 
Internal Revenue Code of 1986, section 501(c)(3), (c)(4), or (c)(6), 26 
U.S.C. 501(c)(3), (c)(4), or (c)(6).
    DHS declines to further revise 8 CFR 214.2(h)(19)(iv) to directly 
reference tax-exempt government entities or public primary and 
secondary schools, as requested by the commenters. USCIS cannot make a 
generalized assessment as to whether a particular organization or 
entity will qualify as a tax-exempt organization under the Internal 
Revenue Code of 1986, section 501(c)(3), (c)(4), or (c)(6), 26 U.S.C. 
501(c)(3), (c)(4), or (c)(6). As stated above, state and local 
governments that currently qualify as nonprofit or tax-exempt 
organizations under 8 CFR 214.2(h)(19)(iv) should generally continue to 
qualify as tax-exempt organizations under new 8 CFR 214.2(h)(19)(iv).
    DHS further reiterates that government entities may still qualify 
for cap exemption. State and local governments may qualify for cap 
exemption under new 8 CFR 214.2(h)(19)(iii)(B)(4), if the nonprofit 
entity has entered into a formal written affiliation agreement with an 
institution of higher education that establishes an active working 
relationship between the nonprofit entity and the institution of higher 
education for the purposes of research or education, and a fundamental 
activity of the nonprofit entity is to directly contribute to the 
research or education mission of the institution of higher education. 
Additionally, they may qualify for cap exemption under new 8 CFR 
214.2(h)(19)(iii)(C) if they are a governmental research organization 
and a fundamental activity of the organization is the performance or 
promotion of basic and/or applied research. They may also qualify under 
new 8 CFR 214.2(h)(8)(iii)(F)(4) if they employ a beneficiary who will 
spend at least half of their work time performing job duties at a 
qualifying institution, organization, or entity and those job duties 
directly further an activity that supports or advances one of the 
fundamental purposes, missions, objectives, or functions of the 
qualifying

[[Page 103112]]

institution, organization, or entity, namely, either higher education, 
nonprofit research, or government research. USCIS will consider all 
relevant factors and review the totality of the evidence for each 
petition using the preponderance of the evidence standard to determine 
cap-exempt status.
    Comment: A joint submission agreed that the proposal should provide 
for government entities that serve research and educational purposes 
and requested USCIS provide additional information relating to how it 
will adjudicate cap exemptions. The commenter expressed concerns with 
the definition of nonprofit organizations, stating it fails to include 
specific guidance for government entities that serve research and 
educational purposes, such as a community health center or a public 
school system. The comment referenced a USCIS letter as indicating that 
USCIS would continue to consider these entities for cap exemption on a 
case-by-case basis, as well as provide clarifying language specifying 
the different ways the cap exemption standard may be met.
    Response: USCIS will continue to consider H-1B cap exemption 
requests on a case-by-case basis, taking into consideration the 
eligibility requirements, as well as any documentation submitted to 
establish eligibility. USCIS reviews the totality of the evidence for 
each petition using the preponderance of the evidence standard and 
cannot make a generalized assessment as to whether a particular 
organization or affiliation will qualify for cap-exempt status. While 
government entities that serve research and educational purposes may 
not qualify for cap exemption by meeting the definition of a nonprofit 
entity, as noted by the commenter, such government entities may still 
qualify for cap exemption under new 8 CFR 214.2(h)(19)(iii)(C) if a 
fundamental activity of the organization is the performance or 
promotion of basic and/or applied research. They may also qualify under 
new 8 CFR 214.2(h)(8)(iii)(F)(4) if they employ a beneficiary who will 
spend at least half of their work time performing job duties at a 
qualifying institution, organization, or entity and those job duties 
directly further an activity that supports or advances one of the 
fundamental purposes, missions, objectives, or functions of the 
qualifying institution, organization, or entity, namely, either higher 
education, nonprofit research, or government research. Revisions to the 
definition of nonprofit or tax-exempt organizations at 8 CFR 
214.2(h)(19)(iv) are intended to clarify and streamline evidentiary 
requirements for cap exemption eligibility. DHS believes the provisions 
in this rule related to H-1B cap exemptions will increase flexibility 
and better reflect Congress's intent, as well as better represent 
modern employment situations.
    Comment: An organization requested that 8 CFR 214.2(h)(19)(iv) be 
amended to include language that an organization will not be precluded 
from establishing eligibility as a United States employer, under 
paragraph (h)(4)(ii), merely because the organization is controlled by 
one individual.
    Response: DHS does not believe that the requested clarification is 
necessary as there is no such preclusion in the regulations, either in 
new 8 CFR 214.2(h)(19)(iv) or (h)(4)(ii).
    Comment: A professional association cited a 2023 letter from USCIS 
\89\ as stating that there is no collaboration time requirement between 
a university and an affiliated nonprofit for the purpose of cap 
exemption and that USCIS recognized university-government 
collaborations for training, education, and research purposes.
---------------------------------------------------------------------------

    \89\ USCIS, Electronic Reading Room, H-1B Cap Exemptions--Baker 
(Oct. 18, 2023), https://www.uscis.gov/sites/default/files/document/foia/H-1BCapExemptions-Baker.pdf.
---------------------------------------------------------------------------

    Response: DHS agrees that there is no statutory or regulatory 
requirement for a particular period of prior collaboration between a 
university and an affiliated nonprofit for purposes of H-1B cap 
exemption eligibility. DHS also recognizes the potential of government 
organizations collaborating with universities for training, education, 
and research purposes. In the case of affiliations, a government 
research entity may qualify for cap exemption if they employ a 
beneficiary who will spend at least half of their work time performing 
job duties at a qualifying institution, organization, or entity and 
those job duties directly further an activity that supports or advances 
one of the permissible fundamental purposes, missions, objectives, or 
functions of the qualifying institution, organization, or entity, 
namely, either higher education, nonprofit research, or government 
research. USCIS officers will review the totality of the evidence for 
each petition using the preponderance of the evidence standard to 
determine whether a particular organization or affiliation will qualify 
for cap-exempt status.
    Comment: A professional association provided several recommended 
amendments to the proposed rule at 8 CFR 214.2(h)(8)(iii)(F)(2), 
including:
     Specifying that a nonprofit entity is ``operated by'' an 
institution of higher education when key personnel of the nonprofit 
entity are shared with the institution of higher education, or whether 
the institution of higher education controls key decisions and programs 
of the nonprofit entity;
     Defining ``attached'' to include its common-sense meaning; 
and the terms ``member, branch, cooperative, or subsidiary'' to be 
consistent with their common legal meaning;
     Providing examples of an ``active working relationship'' 
and confirming that new relationships memorialized through a formal 
written affiliation agreement meet the regulatory standard;
     Confirming that ``formal written affiliation agreements 
entered into between an institution of higher education, and the parent 
organization of the petitioner qualify for purposes of 8 CFR 
214.2(h)(8)(iii)(F)(2)(iv), so long as the petitioner can provide 
documentation to show that petitioner is bound by the terms of the 
affiliation agreement.''
    A joint submission also recommended definitions for the terms 
``active working relationship'' and ``attached.'' These commenters 
stated that a definition of the former could clarify the evidence 
required to show an active working relationship for cap exemption 
purposes and that the latter could address the lack of caselaw or 
guidance on the meaning of ``attached'' by including in the definition 
``a consistent collaboration with the institution of higher education, 
or that the institution of higher education has a vote or key role in 
the administration of the nonprofit's program or budget.''
    Response: DHS appreciates these suggestions. However, DHS did not 
propose to revise 8 CFR 214.2(h)(8)(iii)(F)(2) and declines to do so 
through this rulemaking. Regarding the specific suggestions to clarify 
when a nonprofit entity is ``operated by'' an institution of higher 
education, as reflected in 8 CFR 214.2(h)(8)(iii)(F)(2)(ii), while 
shared key personnel and control of key decisions and programs may be 
relevant factors, DHS reiterates that USCIS officers will review the 
totality of the evidence for each petition using the preponderance of 
the evidence standard to determine whether a particular affiliation 
will qualify for cap-exempt status. DHS declines to define the terms 
``attached'' or ``member, branch, cooperative, or subsidiary'' as they 
appear in 8 CFR 214.2(h)(8)(iii)(F)(2)(iii). Whether a nonprofit entity 
is attached to an institution of higher education depends on its status 
as a member, branch, cooperative, or subsidiary, as is stated in

[[Page 103113]]

the provision, and DHS does not believe these corporate relationships 
require further clarification in this regulation. Further, DHS declines 
to provide a definition of ``active working relationship'' and declines 
to confirm that formal written affiliation agreements between an 
institution of higher education and the parent organization of the 
petitioner qualify for purposes of 8 CFR 214.2(h)(8)(iii)(F)(2)(iv), as 
these relationships will be examined on a case-by-case basis.
    Comment: A commenter said that another way to ensure greater levels 
of consistency in cap exemption adjudications would be for the agency 
to consider a separate rulemaking to establish a distinct adjudication 
procedure for determining whether an entity is eligible for a cap 
exemption, which the commenter said USCIS already does in other 
contexts such as Blanket L petitions. The commenter said that an 
advance determination of eligibility for the H-1B cap exemption with 
the ability to premium process, would give petitioners greater 
certainty in knowing that they must--or may not--file cap-exempt 
petitions for H-1B workers. The commenter added that the lack of 
consistency in adjudications means that petitioners who have been 
previously approved for cap exemption cannot be assured that the 
exemption would be honored in the filing of a subsequent petition even 
when the underlying facts have not changed.
    Response: Under DHS regulations, eligibility for cap exemption is 
determined on a case-by-case basis. The NPRM did not propose to create 
a new, separate adjudication process for cap exemption determinations 
and such a process is not currently operationally feasible. USCIS may 
need to create a new form as well as a framework for this new 
adjudication. Even if DHS were inclined to adopt the commenter's 
suggestion, the regulated public should have an opportunity to comment 
on any such process and framework. DHS is unable to adopt this 
suggestion through this rule but may consider it in future rulemaking 
efforts.
    Comment: An advocacy group generally requested that the proposed 
regulations provide for educational institutions and U.S. Government 
projects as cap-exempt employers. A trade association requested that 
the proposal provide for university research parks specifically for cap 
exemption purposes.
    Response: DHS regulations state that an H-1B nonimmigrant worker is 
exempt from the cap if employed by: (1) an institution of higher 
education; (2) a nonprofit entity related to or affiliated with such an 
institution; (3) a nonprofit research organization; or (4) a 
governmental research organization. See 8 CFR 214.2(h)(8)(iii)(F)(1) 
through (3). Institutions of higher education are defined in section 
101(a) of the Higher Education Act of 1965. If not directly employed by 
the qualifying institution or organization, the individual must meet 
the requirements outlined in 8 CFR 214.2(h)(8)(iii)(F)(4). USCIS 
reviews the totality of the evidence for each petition using the 
preponderance of the evidence standard and cannot make a generalized 
assessment as to whether a particular organization or affiliation will 
qualify for cap-exempt status.
9. Automatic Extension of Authorized Employment Under 8 CFR 
214.2(f)(5)(vi) (Cap-Gap)
    Comment: Many commenters, including law firms, research 
organizations, and trade associations, expressed general support for 
the automatic extension of authorized employment under 8 CFR 
214.2(f)(5)(vi) (``cap-gap''). A commenter stated that the proposed 
provision could help many people, while an advocacy group remarked that 
it would be welcomed by students, employers, and universities. Another 
commenter expressed that the proposed provision would help many newly 
selected H-1B beneficiaries. A university welcomed the proposed 
provisions in as much as they would support graduates who are employed 
in the United States in industry positions. A union expressed that the 
proposed provision would benefit many in the higher education 
workforce.
    Response: DHS agrees with these commenters that automatically 
extending employment authorization for F-1 students during the period 
known as the ``cap-gap'' will help prevent the disruptions in 
employment authorization that some F-1 nonimmigrants seeking H-1B 
change of status have experienced over the past several years. DHS 
recognizes the hardships that a disruption in employment authorization 
could cause to both affected individuals and their employers and seeks 
to prevent potential future disruptions by extending cap-gap relief.
    Comment: Many commenters further expressed that the proposed 
provision would provide benefits to students, including increased 
flexibility, reduced disruption to employment authorization due to 
processing delays, and a smooth transition from their educational 
pursuits to the workforce. A professional association and a joint 
submission expressed support for extending the cap-gap timeframe, 
stating it would allow future medical students to remain in the United 
States to complete their education, training, and residency. A couple 
of commenters, including a university, elaborated that a smoother 
transition for students allows industries to benefit from their skills, 
enhances the United States' labor market, and strengthens its position 
as the premier global destination for higher education. A couple of 
commenters added that the proposed provision is crucial for ensuring 
fairness, efficiency, and transparency in the H-1B process, thereby 
benefitting both applicants and employers. Another commenter remarked 
that the added flexibility to the F-1 program would allow students to 
gain valuable work experience in the United States, thus creating a 
more dynamic, innovative, and inclusive workforce. The commenter 
concluded that this would bolster the overall prosperity and 
competitiveness of U.S. industries on a global stage. While discussing 
the proposed provision's benefits to students, a couple of commenters, 
including a professional association, expressed that the current period 
of ``limbo'' causes American-trained students not to pursue employment 
in the United States. A few commenters, including a trade association 
and a professional association, stated that the proposed provision 
would greatly improve employees' sense of certainty.
    A company expressed general support for the proposed provision, 
noting that the proposal would reduce instances of work authorization 
gaps for individuals utilizing F-1 OPT in the event of increased 
processing times and future unavailability of the premium processing 
option for H-1B cap petitions. Similarly, an advocacy group expressed 
that the proposed provision would provide ``much-needed'' relief in the 
face of delays, including if premium processing is suspended for H-1B 
petitions.
    Response: DHS agrees that the provisions in this rule will benefit 
students, employers, industries, and the United States. Students and 
employers will benefit from greater certainty about the maintenance of 
their employment authorization. Industries will benefit from the skill 
sets of these students. Further, the United States will remain 
attractive to global talent and improve its ability to retain such 
talent.
    Comment: A professional association applauded DHS for taking 
actions that improve efficiency and are based on real-world realities 
such as the academic calendar, USCIS workload,

[[Page 103114]]

and processing times. Similarly, a trade association applauded USCIS 
for the proposed changes to better align status durations and 
authorization dates to current conditions as they pertain to 
adjudications. Another professional association remarked that the 
proposed provision would allow USCIS additional time to process 
petitions before the ``deadline.'' A university expressed optimism that 
the increased processing window for H-1B petitions could alleviate some 
of the delays associated with other benefit applications that USCIS 
adjudicates, such as OPT, STEM OPT, or changes of status.
    Response: DHS believes that automatically extending employment 
authorization for F-1 students during the period known as the ``cap-
gap'' will result in more flexibility for F-1 students and USCIS and 
will help to avoid disruptions to U.S. employers that are lawfully 
employing F-1 students. In addition to avoiding employment disruptions, 
the lengthier extension of F-1 status and post-completion OPT or 24-
month extension of post-completion OPT employment authorization for F-1 
students with pending H-1B petitions until April 1, which is one year 
from the typical initial cap filing start date, accounts for USCIS' 
competing operational considerations and would enable the agency to 
balance workloads more appropriately for different types of petitions.
    Comment: A few commenters expressed that the proposed provision 
would positively impact the U.S. economy. A commenter remarked that the 
increased flexibility in the F-1 program would open the door to skilled 
students who contribute significantly to the economy. Another commenter 
remarked that the proposed provision would have positive impacts on the 
U.S. economy, including by ensuring the payment of education fees and 
the collection of income taxes from workers. A company commented that 
the proposed enhancements would play a pivotal role in attracting and 
retaining top global talent that is crucial for propelling U.S. 
economic growth.
    Response: DHS agrees with this feedback that implementing this 
automatic extension until April, rather than October 1, of the relevant 
fiscal year will provide stability for F-1 students that will increase 
the United States' ability to attract and retain top global talent. DHS 
also generally agrees that this provision will have positive impacts on 
the U.S. economy, such as by benefiting employers to gain productivity 
and potential profits that the F-1 students' continuing employment will 
provide, as discussed in section IV(A)(3)(viii) below.
    Comment: Multiple commenters stated that the proposed provision 
would provide benefits to employers. A few commenters, including a 
trade association, a professional association, and a business 
association, remarked that the proposed provision would greatly improve 
employers' sense of certainty, while a joint submission stated that the 
proposal would provide much needed predictability for employers to 
lawfully employ F-1 students. A professional association and a trade 
association commented that the proposed flexibilities would allow for 
better recruitment efforts among U.S. employers. A company expressed 
that the proposed improvements would support U.S. companies at the 
frontier of innovation. A university stated that the proposed cap-gap 
extension would reduce the negative impact on output experienced by 
employers, specifically for the jobs in research or technology-related 
areas. A trade association remarked that extending the cap-gap coverage 
would save company costs since they would not have to file under 
premium processing. A legal services provider agreed with the proposed 
provision, reasoning it should reduce the instances where employers 
have to terminate or place their ``cap-gap'' employees on leave on 
October 1 of a given year while their H-1B cap petitions were still 
pending.
    Response: DHS agrees that expanding the duration of the cap-gap 
extension and employment authorization, as applicable, will benefit 
employers by providing stability and helping to avoid disruptions 
caused by adjudication delays.
    Comment: A commenter suggested that USCIS provide F-1 students in 
OPT with the option of three to six months of leave to travel, in 
addition to the existing 60-day grace period, after graduation. The 
commenter added that this would allow students to visit their home 
country, travel in case of emergencies, and reduce pressure on the job 
market. A commenter suggested that USCIS consider extending OPT to at 
least 2 years for all undergraduate and graduate programs, adding that 
the U.S. is at a disadvantage compared to other developed markets that 
offer more generous employment visa options. Another commenter 
requested that USCIS extend validity of STEM OPT automatically until 
May of the year in which it expires, thereby providing an additional 
opportunity to get into the H-1B lottery and use the cap-gap if 
selected.
    Response: DHS declines to adopt the commenter's suggestions 
concerning OPT and the STEM OPT extension, as such suggestions are 
beyond the scope of this rulemaking.
    Comment: A commenter asked if the starting criterion for cap-gap 
could be March 1 instead of April 1 to address the issue of applicants 
who are registered in the lottery but lose work authorization before 
the results are announced. A couple of commenters asked that cap-gap 
extensions be based on the status of the student applicant at the time 
of H-1B registration rather than the status at the time of petition 
filing, reasoning the current rule is disadvantageous to applicants 
whose OPT status expires during the H-1B filing period.
    A company encouraged DHS to further extend cap-gap to all 
beneficiaries registered in the H-1B lottery until USCIS concludes the 
lottery selection for the fiscal year. A commenter further requested an 
automatic extension of F-1 OPT until USCIS officially announces cap 
fulfillment or the commencement of the next cap season, stating this 
would address challenges faced by students who are not initially 
selected but their OPT status expires before the next round of 
selection.
    Response: DHS declines to adopt the commenters' suggestions to 
change the ``starting criterion'' for the automatic extension from 
April 1 to March 1, or otherwise to the date that an organization 
submits an H-1B registration on a student's behalf. As explained in the 
NPRM, DHS was concerned with extending employment authorization and 
status because it could reward potentially frivolous filings that would 
enable students who may ultimately be found not to qualify for H-1B 
status. 88 FR 72870, 72887 (Oct. 23, 2023). DHS does not believe that 
the risks of allowing frivolous filings is outweighed by other factors 
that might merit extending cap-gap employment or status prior to filing 
a petition.
    Regarding the suggestions to allow F-1 students remain in lawful 
status through the adjudication of H-1B petitions filed on their 
behalf, DHS will not make the requested changes to extend F-1 status 
and associated employment authorization, as applicable, through the 
commencement of the next cap season, when USCIS concludes registration 
selection for the relevant fiscal year, or when USCIS announces that 
the cap has been reached. DHS does not believe that these changes are 
necessary because April 1 of the relevant fiscal year is

[[Page 103115]]

further into the future than those three conditioning events. In the 
three most recent H-1B cap seasons, USCIS has commenced the next H-1B 
cap season, concluded all registration selection rounds, and announced 
that the respective H-1B caps have been fulfilled before April 1 of the 
respective fiscal years.
    Comment: While expressing general support for the proposal, an 
attorney suggested that DHS revise the cap-gap provision to 
automatically extend status and employment authorization until 
adjudication of the H-1B petition is complete. The attorney added that 
there is no guarantee that extending the cap-gap would solve the issue 
at hand due to current processing delays and USCIS adjudication 
backlogs. A trade association echoed the request for the cap-gap 
provision to be extended until final adjudication of the H-1B petition, 
reasoning that the risk of fraud would be relatively low.
    Response: As noted in the NPRM, according to USCIS data for FY 2016 
through 2022, USCIS adjudicated approximately 99 percent of H-1B cap-
subject petitions requesting a change of status from F-1 to H-1B by 
April 1 of the relevant fiscal year.\90\ 88 FR 72870, 72887 (Oct. 23, 
2023). By automatically extending employment authorization until April 
1 of the relevant year, DHS expects USCIS will be able to adjudicate 
nearly all H-1B cap-subject petitions requesting a change of status 
from F-1 to H-1B by this date.\91\ DHS declines to automatically extend 
employment authorization until the final adjudication of the H-1B 
petition given the size of the affected population and the subjectivity 
of the circumstances surrounding the delay in final adjudication of H-
1B petitions for this population. Further, providing a certain end-date 
of employment authorization provides needed clarity with respect to the 
verification of employment authorization and reduces the risk of 
unauthorized employment.
---------------------------------------------------------------------------

    \90\ USCIS, OP&S Policy Research Division (PRD), Computer-Linked 
Application Information Management System 3 (C3) database, Oct. 27, 
2022. PRD187.
    \91\ See 88 FR 72870, 72887.
---------------------------------------------------------------------------

    Comment: A joint submission proposed that USCIS eliminate the April 
1 outside limit on cap-gap coverage and instead extend status and work 
authorization throughout the entire pendency of the petition. 
Alternatively, the commenter recommended further clarity regarding the 
proposed regulatory term ``until the validity start date of the 
approved petition'' and proposed alternative language to refer to a 
petition that ``not been finally adjudicated by the requested start 
date on the petition.''
    Response: DHS declines to adopt the commenters' suggestion to 
extend status and work authorization through the adjudication of the 
petition for the reasons explained above. Further, DHS believes that 
the regulatory text stating that duration of status and employment 
authorization will be automatically extended ``until the validity start 
date of the approved petition'' is sufficiently clear. The commenters' 
suggested language regarding petitions that have not been finally 
adjudicated would also allow extensions of status and work 
authorization for petitions that have been denied and appealed, which 
was not contemplated in the proposed rule. DHS is concerned that such 
an expansion could create an incentive for petitioners to file 
frivolous appeals in order to obtain extensions of status or work 
authorization, and therefore, declines to adopt this suggestion.
    Comment: Many commenters provided additional suggestions in 
response to the proposed provision. To address the F-1 60-day grace 
period in the cap-gap context, a professional association asked DHS to 
include language in 8 CFR 214.2(f)(5)(vi) to clarify when the 60-day 
grace period would start if an H-1B petition has been denied, revoked, 
or withdrawn before April 1 or remains pending on April 1.
    Response: As noted in the NPRM, if the H-1B petition underlying the 
cap-gap extension is denied before April 1, then, consistent with 
existing USCIS practice, the F-1 beneficiary of the petition, as well 
as any F-2 dependents, would generally receive the standard F-1 grace 
period of 60 days to depart the United States or take other appropriate 
steps to maintain a lawful status. 88 FR 72870, 72887 (Oct. 23, 2023) 
(citing 8 CFR 214.2(f)(5)(iv)). If the H-1B petition is still pending 
on April 1, then the beneficiary of the petition is no longer 
authorized for OPT and the 60-day grace period begins on April 1. 88 FR 
72870, 72887 (Oct. 23, 2023). Although the F-1 beneficiary may not work 
during the 60-day grace period, individuals generally have been allowed 
to remain in the United States in an authorized period of stay while a 
subsequent H-1B petition and change of status request is pending. While 
this is stated in the preamble to the proposed rule, DHS declines add 
this language to the regulatory text.
    Comment: An advocacy group provided the following suggestions in 
response to the proposed provisions:
     Extend the 24-month extension of post-completion OPT an 
additional 24 months in case the OPT beneficiary is not selected in the 
lottery;
     Extend OPT to a total of 36 months; and
     Increase the grace period to 180 days so that the OPT 
holder has adequate time to switch back to F-1 or obtain another 
status.
    Response: The revision of the cap-gap extension finalized in this 
rulemaking is intended to provide greater flexibility and better 
prevent disruptions in employment authorization specifically for F-1 
students who are beneficiaries of qualifying H-1B cap-subject 
petitions. As the suggestions to expand the STEM OPT extension, expand 
the period of time during which F-1 students may engage in OPT, and 
double the F-1 grace period, are unrelated to the goals of cap-gap 
extension, they are beyond the scope of this rulemaking and DHS 
declines to adopt the suggestions.
    Comment: Several commenters generally opposed the extension of cap-
gap and work authorization. A commenter stated that the cap-gap 
extension would hurt American students, while another commenter 
expressed that F-1 students should be limited to 90 days to find a job, 
as this would take jobs away from citizens who better understand the 
culture and workings of the United States.
    Response: To qualify for this automatic extension, an F-1 student 
must be the beneficiary of a pending, timely-filed, non-frivolous H-1B 
cap-subject petition that requests a change of status. See new 8 CFR 
214.2(f)(5)(vi)(A). As these F-1 students are necessarily seeking 
employment that is subject to annual numerical allocations, and the H-
1B petitions filed on their behalf by a petitioning employer must be 
non-frivolous, DHS believes that the eligibility requirements for the 
automatic extension are sufficient to ensure that U.S. citizen students 
and workers are not adversely affected by the continued ability of 
these F-1 students to maintain employment authorization until April 1 
of the relevant fiscal year.
    Comment: While expressing general opposition, an advocacy group 
stated that DHS should deny visas to employers of post-graduate 
students until U.S. citizens in similar situations find employment. 
Citing an opinion piece on its own website, an organization stated that 
the proposed rule does not address the incentives that employers are 
given to hire F-1 nonimmigrant visa holders over recent American 
graduates. Another commenter asked USCIS to reconsider any changes that 
expand access to OPT, reasoning that the system incentivizes

[[Page 103116]]

employers to favor noncitizens over citizens since many OPT employers 
and workers are excused from paying the usual Federal payroll taxes. An 
advocacy group expressed that the proposed provision is not rooted in 
statute nor does it cite any legal justification for the change, thus 
the proposed changes are unauthorized by law. Similarly, another 
organization urged DHS to rescind all regulations and proposals that 
allow F-1 nonimmigrant visa holders to work in the United States 
following graduation, stating that OPT is not authorized under Federal 
immigration law and creates unlawful competition among workers. The 
organization added that allowing F-1 nonimmigrant visa holders to 
extend their period of authorized stay for the purpose of working after 
they are no longer students violates the scheme Congress created to 
regulate the admission of nonimmigrants and employment in the United 
States.
    Response: DHS acknowledges the concerns of these commenters but 
notes that the INA does not contain a requirement that all H-1B 
petitioners seeking to employ F-1 nonimmigrants conduct a labor market 
test to determine that there are no able, willing, qualified, and 
available U.S. workers. DHS declines to impose such a requirement, as 
that was not proposed in the NPRM and is beyond the scope of this 
rulemaking. Additionally, DHS does not agree that potential short-term 
tax incentives employers or workers may experience are a reason to 
avoid finalizing revisions to 8 CFR 214.2(f)(5)(vi). DHS is aware that, 
under Internal Revenue Service (IRS) rules, some noncitizens, including 
F-1 students, may be exempt from paying some Federal taxes for a 
certain duration of time. However, it is not certain that every F-1 
student who benefits from the automatic cap-gap extension of authorized 
employment will qualify for exemption from Federal taxation. DHS does 
not believe that potential short-term tax exemption for some F-1 
students is a reason to decline to adopt this provision and notes that 
changes to IRS rules to extend the same Federal tax obligations to 
employers of F-1 students would need to be addressed by the IRS, not 
DHS. DHS will proceed with expanding the automatic extension as 
proposed.
    DHS disagrees that the longstanding cap-gap provisions, or the 
proposed changes to the cap-gap provisions as finalized in this rule, 
are ultra vires. As stated under the Legal Authority section of the 
NPRM, section 214(a)(1) of the INA, 8 U.S.C. 1184(a)(1), authorizes the 
Secretary to prescribe, by regulation, the time and conditions of the 
admission of nonimmigrants. 88 FR 72872-72873. As the D.C. Circuit 
Court of Appeals held, ``[t]he Department's charge to set the 
`conditions' of nonimmigrant admission includes power to authorize 
employment--a fact that Congress has expressly recognized by statute.'' 
Wash. All. of Tech. Workers v. Dep't of Homeland Sec., 50 F.4th 164, 
190 (D.C. Cir. 2022). Thus, contrary to the commenter's assertion, the 
expansion of the cap-gap provisions as finalized in this rule are 
consistent with the Secretary's authority under section 214(a)(1) of 
the INA, 8 U.S.C. 1184(a)(1) and not ultra vires.
    Comment: A professional association recommended that USCIS extend 
dual intent to F-1 visas and offer a ``direct route'' for doctoral 
candidates to transition from F-1 to H-1B status, as this would help 
attract and retain foreign talent and benefit the U.S. economy.
    Response: DHS declines to adopt the suggestions. The requirement 
that a student have a residence in a foreign country which the student 
has no intention of abandoning and to demonstrate nonimmigrant intent 
is grounded in statute and beyond the scope of this rulemaking. As to 
the request to offer a ``direct route'' for doctoral candidates to 
transition from F-1 to H-1B status, it is not clear if the commenter is 
requesting a cap exemption, a set aside under the advanced degree 
exemption, or a different ``direct route.'' Regardless, DHS declines to 
adopt this suggestion. DHS responded to a similar comment in the final 
rule, ``Improving the H-1B Registration Selection Process and Program 
Integrity,'' published on February 2, 2024. This commenter requested 
that DHS introduce degree-based categorizations in the selection 
system, reasoning that such an approach would allow more advanced 
degrees, like Ph.D.s., to have a unique category to align with the 
specialty-based nature of the H-1B classification. 89 FR 7456, 7474 
(Feb. 2, 2024). DHS responded to this comment, explaining that in the 
NPRM, DHS did not propose to prioritize or give preference to any 
registration based on skills, salaries/wages, education, experience, 
industry, or any other new criteria and declined to implement this 
suggestion. 89 FR 7456, 7474 (Feb. 2, 2024). Similarly, DHS will not 
adopt this suggestion.
    Comment: A university encouraged USCIS to improve the Computer 
Linked Application Information Management System (CLAIMS), so that 
correct data flows into the Student and Exchange Visitor Information 
System (SEVIS) once USCIS has adjudicated H-1B petitions for which F-1 
students are listed as beneficiaries. The university elaborated that if 
this solution is not feasible, the Student and Exchange Visitor Program 
(SEVP) could be given access to the approval information to increase 
communication between USCIS and SEVP.
    Response: DHS and component agencies are making continuous 
enhancements to these and other systems. However, DHS believes that 
further improvements, to the extent they are necessary, can be 
accomplished outside of the regulatory process. Therefore, DHS declines 
to adopt these suggestions as part of this final rule.
10. Other Comments on Benefits and Flexibilities
    Comment: A commenter remarked that the rule should be flexible and 
adaptable to changing economic conditions and workforce demands to 
ensure that the programs remain responsive to the needs of American 
businesses and the global economy. Another commenter encouraged USCIS 
to explore solutions for international students who wish to stay and 
contribute to the United States by exploring alternative visa pathways 
or retention measures.
    Response: While DHS values flexibility and adaptability, this 
comment lacks specificity about the changes DHS could make to this rule 
to promote those values. DHS always strives to balance flexibility and 
adaptability with clarity and integrity, and DHS believes this rule 
strikes that balance. With respect to exploring solutions for 
international students who wish to stay and contribute to the United 
States, increasing the automatic extension of duration of status and 
authorized employment under 8 CFR 214.2(f)(5)(vi) will allow F-1 
students greater flexibility to remain in the United States while their 
H-1B petitions are adjudicated. Additional changes as suggested by the 
commenter, such as exploring alternative visa pathways or retention 
measures, are beyond the scope of this rulemaking.
    Comment: A commenter proposed the inclusion of provisions that 
allow H-1B visa holders to engage in supplementary income-generating 
activities in creative and AI-related fields, reasoning that these 
opportunities would foster innovation, job creation, and contribute to 
the United States' cultural and technological diversity. Another 
commenter suggested that H-1B holders be permitted to switch or work 
with multiple employers at the same time.

[[Page 103117]]

    Response: It is unclear in what context the commenters propose to 
allow H-1B workers to engage in supplementary income-generating 
activities, such that existing regulations would not allow for such 
arrangements. An H-1B beneficiary may change employers if their new 
employer files a new petition requesting H-1B classification and an 
extension of stay for the beneficiary, see 8 CFR 214.2(h)(2)(i)(D). 
With respect to allowing H-1B beneficiaries to work for multiple 
employers, DHS notes that H-1B workers are permitted to change 
employers, see 8 CFR 214.2(h)(2)(i)(D), and obtain authorization to 
work concurrently for multiple employers, see 8 CFR 214.2(h)(2)(i)(C) 
(requiring that a separate petition be filed by each employer). In 
either scenario, an eligible H-1B beneficiary may start concurrent or 
new employment upon the filing of a non-frivolous H-1B petition or as 
of the requested start date, whichever is later. See 8 CFR 
214.2(h)(2)(i)(H). Therefore, DHS will not make a change to this rule 
resulting from these comments.
    Comment: A joint submission requested clarification on immediate 
and automatic revocation, specifically on the language stating that 
``[t]he approval of an H-1B petition is also immediately and 
automatically revoked upon notification from the H-1B petitioner that 
the beneficiary is no longer employed.'' While discussing a terminated 
worker's ability to rejoin a petitioning company within a 60-day grace 
period so long as the petition has yet to be revoked, the commenters 
stated that the current requirement to notify USCIS immediately of a 
termination, along with the proposed automatic revocation provision, 
would effectively nullify this ability.
    Response: DHS proposed to amend 8 CFR 214.2(h)(11)(ii) as part of 
its effort to modernize and improve the H-1B program, adding benefits 
and flexibilities and eliminating unnecessary burdens. Currently, 8 CFR 
214.2(h)(11)(i)(A) states that, ``If the petitioner no longer employs 
the beneficiary, the petitioner shall send a letter explaining the 
change(s) to the director who approved the petition.'' When a 
petitioner submits a letter according to 8 CFR 214.2(h)(11)(i)(A), 
oftentimes the petitioner does not further request USCIS to take a 
specific action on the petition and therefore USCIS has to take the 
extra step of issuing an additional notice, such as a Notice of Intent 
to Revoke (NOIR) to confirm the petitioner's intent. This is an 
inefficient process as the NOIR essentially asks the petitioner to 
confirm what was already stated in the letter notifying USCIS that it 
no longer employs the beneficiary. New 8 CFR 214.2(h)(11)(ii) 
eliminates this redundancy and provides for immediate and automatic 
revocation upon notification from the H-1B petitioner that the 
beneficiary is no longer employed by the petitioner. The requirement 
that the petitioner notify USCIS of any material change, including when 
a beneficiary is no longer employed by a petitioner, is not a new 
requirement. DHS believes that this slight modification will increase 
efficiency for both stakeholders and USCIS, and reduce unnecessary, 
time-consuming tasks such as issuing unnecessary notices for which 
USCIS rarely receives a response or outcome other than revocation of 
the approved H-1B petition.
    USCIS also has encountered companies using this technicality in the 
regulatory language to allow beneficiaries to retain an approved H-1B 
petition for additional time beyond that for which they would otherwise 
be eligible. These companies would submit a statement saying the 
beneficiary stopped working, thus complying with the existing 8 CFR 
214.2(h)(11)(ii) regulatory language, but they would not explicitly 
request withdrawal or automatic revocation of the petition to retain 
the appearance of a valid petition approval for the beneficiary until a 
NOIR, petitioner response, and subsequent revocation could be 
completed. The appearance of a valid petition approval, and 
corresponding maintenance of status, creates potential confusion, 
particularly for other agencies that may rely upon the approval notice 
to validate eligibility for certain benefits.
    The joint submission also states that finalizing this rule would 
``effectively nullify the clear intent'' of an existing USCIS web page 
\92\ explaining options for terminated nonimmigrant workers because 
that web page indicates that a terminated worker can rejoin a 
petitioning company during the 60-day grace period as long as the 
petition has not been revoked. However, DHS notes that the web page 
further explains ``If your employer notified us of the termination, 
thus automatically revoking the petition approval, the employer would 
need to file a new petition with us.'' \93\ This is consistent with new 
8 CFR 214.2(h)(11)(ii). DHS therefore does not agree that new 8 CFR 
214.2(h)(11)(ii) will ``nullify the intent'' of the web page. Further, 
DHS believes that finalizing this rule will eliminate redundancy and 
promote efficiency in adjudications. Therefore, DHS declines to make 
any changes in response to this comment.
---------------------------------------------------------------------------

    \92\ See DHS, USCIS, Options for Nonimmigrant Workers Following 
Termination of Employment (last reviewed/updated Apr. 1, 2024),
    https://www.uscis.gov/working-in-the-united-states/information-for-employers-and-employees/options-for-nonimmigrant-workers-following-termination-of-employment.
    \93\ See DHS, USCIS, Options for Nonimmigrant Workers Following 
Termination of Employment (last reviewed/updated Apr. 1, 2024),
    https://www.uscis.gov/working-in-the-united-states/information-for-employers-and-employees/options-for-nonimmigrant-workers-following-termination-of-employment.
---------------------------------------------------------------------------

F. Program Integrity

11. Provisions To Ensure Bona Fide Job Offer for a Bona Fide Specialty 
Occupation Position
i. Contracts
    Comment: A joint submission and a trade association stated that 
requesting contractual agreements would not help adjudicators in 
determining whether the position satisfies the specialty occupation 
requirements, as they often do not contain information about the 
position's minimum educational requirements. Both commenters added that 
these documents do not normally discuss minimum educational 
requirements for jobs being performed pursuant to the agreements as 
they are not typically relevant to the parties' business interests, 
cannot be practicably obtained due to nondisclosure provisions within 
those contracts, that the contractual evidence of minimum educational 
requirements is not always germane to the specialty occupation 
criteria, and that an H-1B petitioner may not have a contract with a 
third-party employer. The joint submission stated that when a 
petitioner and a client negotiate for a specific deliverable, clients 
do not typically seek to impose any minimum educational requirements on 
the employees the petitioner might assign to the project as the 
satisfactory completion of the project is the overarching objective. 
Similarly, a legal services provider voiced concern that most work 
orders would not contain the minimum educational requirements outlined 
in the proposed rule and that a USCIS officer could deny the petition 
even when the minimum educational requirements to perform the duties 
are clear from all of the other evidence submitted.
    Response: DHS is aware that contracts do not always contain minimum 
educational requirements. DHS also recognizes that information that may 
be

[[Page 103118]]

relevant to one scenario (e.g., where the beneficiary will be staffed 
to fill a position within the end-client's organization) might not be 
equally relevant or probative to other scenarios (e.g., where the 
petitioner is hired to complete a project for the end-client and 
determine necessary staffing allocation to complete the project). DHS 
did not propose to require the submission of contracts in all 
instances. Rather, DHS proposed to clarify its existing authority to 
request contracts, work orders, or similar evidence, in appropriate 
cases in accordance with 8 CFR 103.2(b) (USCIS may request additional 
evidence if the evidence submitted does not establish eligibility) and 
214.2(h)(9) (``USCIS will consider all the evidence submitted and any 
other evidence independently required to assist in adjudication.''). 
Current 8 CFR 214.2(h)(4)(iv)(A) requires petitioners to submit 
evidence to establish that the beneficiary is qualified to perform 
services in a specialty occupation and that the services the 
beneficiary is to perform are in a specialty occupation. The petitioner 
bears the burden of establishing eligibility for an immigration 
benefit.\94\ If the required initial evidence submitted by the 
petitioner is sufficient to establish that the services the beneficiary 
is to perform are in a specialty occupation and that the beneficiary is 
qualified to perform services in that specialty occupation, then 
additional evidence would not be needed to establish the minimum 
educational requirements for the position and would, therefore, not be 
requested under new 8 CFR 214.2(h)(4)(iv)(C). However, under existing 
USCIS policy, if the petitioner has not satisfied its burden, the 
adjudicating officer would generally issue an RFE to request evidence 
of eligibility.\95\ The RFE should identify the eligibility 
requirement(s) that has not been established and why the evidence 
submitted is insufficient; identify any missing evidence specifically 
required by the applicable statute, regulation, or form instructions; 
identify examples of other evidence that may be submitted to establish 
eligibility; and request that the petitioner submit such evidence. The 
adjudicating officer should not request evidence that is outside the 
scope of the adjudication or otherwise irrelevant to an identified 
deficiency.\96\ At the same time, DHS will not limit USCIS' prerogative 
to request contracts, work orders, or other similar evidence if it is 
determined such evidence would aide adjudicators in ascertaining 
whether a position is a specialty occupation, as claimed. Consistent 
with this policy, new 8 CFR 214.2(h)(4)(iv)(C) lists examples of 
evidence that may be requested by USCIS, and submitted by the 
petitioner, to establish eligibility. If evidence, such as contracts or 
work orders, is unavailable or does not contain the requested 
information, the petitioner may submit alternative evidence to 
establish eligibility. Regarding the commenter's concern about 
petitions where the position's minimum educational requirements are 
clear from all of the other evidence submitted, in such a case, USCIS 
would not likely issue an RFE for additional evidence of the position's 
minimum educational requirements.
---------------------------------------------------------------------------

    \94\ See INA 291, 8 U.S.C. 1361.
    \95\ See USCIS Policy Manual, Vol. 1, ``General Policies and 
Procedures,'' Part E, ``Adjudications,'' Chap. 6, ``Evidence,'' 
https://www.uscis.gov/policy-manual/volume-1-part-e-chapter-6.
    \96\ See USCIS Policy Manual, Vol. 1, ``General Policies and 
Procedures,'' Part E, ``Adjudications,'' Chap. 6, ``Evidence,'' 
https://www.uscis.gov/policy-manual/volume-1-part-e-chapter-6.
---------------------------------------------------------------------------

    Comment: An attorney, writing as part of a form letter campaign, 
requested that USCIS retain its current guidance noted in the document 
``PM-602-1114 Recission of Policy Memorandum on Contracts and 
Itineraries'' which the commenter said, ``does not create extra work 
for both the H-1B petitioner and their clients.'' A law firm stated 
that the request for contracts would run counter to other streamlining 
measures and be contrary to the statements in the proposed rule.
    Response: As stated in the NPRM, USCIS already has the authority to 
request contracts and other similar evidence. 88 FR 72870, 72901 (Oct. 
23, 2023). DHS acknowledges that since USCIS Policy Memorandum PM-602-
0114, ``Rescission of Policy Memoranda,'' was issued in July 2020, 
contracts and legal agreements have generally not been requested for H-
1B petitions. DHS further acknowledges, as a result of new 8 CFR 
214.2(h)(4)(iv)(C) and other provisions of this final rule, that 
petitioners may be requested to submit such documentation in some 
cases. However, while USCIS has not generally requested such evidence 
in recent years, USCIS retains the authority to request such evidence 
and, new 8 CFR 214.2(h)(4)(iv)(C) is a codification of that authority. 
Contracts and similar evidence may be helpful to establish the minimum 
educational requirements to perform the duties of a position and that 
there is a bona fide job offer and a position in a specialty occupation 
for the beneficiary, thereby establishing eligibility for H-1B 
nonimmigrant classification. Therefore, DHS believes it is appropriate 
to codify the authority to request such evidence and put stakeholders 
on notice of the kinds of evidence that could be requested to establish 
the bona fide nature of the beneficiary's position and the minimum 
educational requirements to perform the duties. Further, DHS does not 
believe that this provision runs counter to other measures from the 
proposed rule because, again, petitioners bear the burden of 
establishing eligibility for an immigration benefit \97\ and nothing in 
this rule is intended to relieve petitioners of that burden.
---------------------------------------------------------------------------

    \97\ See INA 291.
---------------------------------------------------------------------------

    In response to stakeholder comments, DHS is revising the contracts 
provision at 8 CFR 214.2(h)(4)(iv)(C) in this final rule to state that 
USCIS may request contracts or similar evidence ``showing the bona fide 
nature of the beneficiary's position'' rather than ``showing the terms 
and conditions of the beneficiary's work'' as stated in the NPRM. This 
revision is intended to clarify that USCIS will be reviewing contracts 
or similar evidence to determine if the position is bona fide, not that 
USCIS will be specifically looking at the terms and conditions of the 
beneficiary's work, which could include the terms and conditions as 
specified by the petition, but would not include the terms and 
conditions of the beneficiary's work more generally, which could imply 
that officers will be looking for an employer-employee relationship or 
the right to control. As explained in the NPRM and elsewhere in this 
final rule, DHS is removing the reference to the employer-employee 
relationship from the definition of U.S. employer, consistent with 
current practice since June 2020 when, following a court order and 
settlement agreement,\98\ USCIS formally rescinded its January 2010 
policy guidance on the employer-employee relationship.\99\ As a result, 
USCIS no longer requires the petitioner to establish a right to control 
the beneficiary's work.
---------------------------------------------------------------------------

    \98\ See ITServe All., Inc. v. Cissna, 443 F.Supp.3d 14, 19 
(D.D.C. 2020) (finding that the USCIS policy interpreting the 
existing regulation to require a common-law employer-employee 
relationship violated the Administrative Procedure Act as applied 
and that the itinerary requirement at 8 CFR 214.2(h)(2)(i)(B) is 
ultra vires as it pertains to H-1B petitions).
    \99\ See USCIS, ``Rescission of Policy Memoranda,'' PM-602-0114 
(June 17, 2020), https://www.uscis.gov/sites/default/files/document/memos/PM-602-0114_ITServeMemo.pdf. This memorandum rescinded the 
USCIS policy memorandum ``Determining Employer-Employee Relationship 
for Adjudication of H-1B Petitions, Including Third-Party Site 
Placements,'' HQ 70/6.2.8 (AD 10-24) (Jan. 8, 2010).
---------------------------------------------------------------------------

    As also noted above, the provision provides greater transparency by 
putting

[[Page 103119]]

stakeholders on notice of the kinds of evidence that could be requested 
to establish the bona fide nature of the beneficiary's specialty 
occupation position and the minimum educational requirements to perform 
the duties. Such evidence will not be requested in all cases, but only 
those where the petitioner has otherwise failed to meet its burden of 
proof to establish eligibility by a preponderance of the evidence. 
Finally, DHS believes that codification of the authority to request 
contracts or other evidence will help enhance the integrity of the H-1B 
program, which is a primary goal of this final rule.
    Comment: A joint submission and a trade association stated 
contracts and work orders specifying minimum educational requirements 
are not legally probative in most employment contexts, and in actual 
business practice often do not exist at all, and that the proposed 
provision ``creates the potential to exclude sectors of the economy 
from the H-1B program, as well as place burdensome obligations on 
parties not before USCIS.'' The joint submission added that the scope 
of the burden for providing documentation would be disproportionate to 
the goal of ensuring a bona fide job offer, stating that although the 
NPRM does not mandate the submission of contracts, it is strongly 
suggested. The commenters requested USCIS give more consideration to 
codifying that client contracts would continue to be an optional--but 
not necessary--type of evidence to support an H-1B petition.
    Joint submission commenters wrote that codifying the ability to 
request contracts would be an invitation for adjudicators to view 
contracts as a basic requirement for all H-1B petitions, even when such 
contracts are legally irrelevant to establishing the existence of a 
bona fide job offer, particularly in consideration of the fact that the 
burden of proof is a ``preponderance of the evidence'' standard. The 
commenters added that the proposed regulation goes far beyond that 
which is necessary by establishing a requirement potentially applicable 
to all that is only probative in a subset of situations. The joint 
submission also stated that the types of evidence envisioned by this 
rule are not universal to all business models and arrangements, making 
the rule significantly burdensome, if not in some cases impossible. The 
commenters said that the proposed regulatory change also fails to 
recognize that the petitioning H-1B employer may not have a contract 
with the end client at whose business location the H-1B worker would be 
placed upon which to draw, which the commenter described as an entirely 
common practice. For these reasons, the commenters said that the 
proposed regulation fails to recognize the complex and rapidly changing 
nature of modern-day business arrangements, and, in so doing, creates 
unnecessary and unfair roadblocks to employers who need to access key 
talent using the H-1B program.
    Response: As noted, new 8 CFR 214.2(h)(4)(iv)(C) is a codification 
of DHS's existing authority to request contracts, work orders, or 
similar evidence, in appropriate cases in accordance with 8 CFR 
103.2(b) (USCIS may request additional evidence if the evidence 
submitted does not establish eligibility) and 214.2(h)(9) (``USCIS will 
consider all the evidence submitted and any other evidence 
independently required to assist in adjudication.''). DHS does not 
expect that such evidence will be requested in all cases, and thus 
disagrees with commenters that the provision will be unduly burdensome, 
create unfair roadblocks for petitioners, or exclude sectors of the 
economy. DHS recognizes that information that may be relevant in one 
scenario (e.g., where the beneficiary will be staffed to fill a 
position within the end-client's organization) might not be equally 
relevant or probative in other scenarios (e.g., where the petitioner is 
hired to complete a project for the end-client and determine necessary 
staffing allocation to complete the project). DHS did not propose to 
request the submission of contracts in all instances.
    With respect to commenters' concerns that specified documentation 
may not exist and that the types of evidence identified in the 
regulation ``are not universal,'' DHS notes that, in USCIS's 
adjudicative experience, generally, petitioners have been able to 
submit written agreements (or business arrangements/requests for 
services) between relevant parties in a service transaction and that 
such agreements are relevant and probative in certain cases. It is 
reasonable to expect petitioners, when relevant and probative, to 
continue to submit such documentation, most often in the form of 
contracts, work orders, or end-client letters. These documents, when 
relevant and probative, often assist DHS in establishing the type of 
work to be performed, the bona fide nature of the specialty occupation 
position, the skills and resources required to perform the work, and 
the bona fide nature of the beneficiary's job offer. Further, new 8 CFR 
214.2(h)(4)(iv)(C) provides a non-exhaustive list of documents that may 
be requested in order to establish the bona fide nature of the 
beneficiary's position and the minimum educational requirements to 
perform the duties of the position. However, it is important to note 
that new 8 CFR 214.2(h)(4)(iv)(C) does not require or mandate 
submission of any specific type of evidence or in any specific format 
and, as noted in the NPRM, petitioners may submit other documentation 
that is detailed enough to provide a sufficiently comprehensive view of 
the position being offered to the beneficiary and the bona fide nature 
of the position. 88 FR 72870, 72901 (Oct. 23, 2023). While this 
provision does not require petitioners to submit any specific type of 
documentation, such as contracts or legal agreements between the 
petitioner and third parties, the petitioner must demonstrate 
eligibility for the benefit sought.\100\
---------------------------------------------------------------------------

    \100\ See USCIS, ``Rescission of Policy Memoranda,'' PM-602-0114 
(June 17, 2020), https://www.uscis.gov/sites/default/files/document/memos/PM-602-0114_ITServeMemo.pdf.
---------------------------------------------------------------------------

    DHS also disagrees that this codification of USCIS' authority to 
request evidence showing the bona fide nature of the beneficiary's 
position and the minimum educational requirements to perform the duties 
is unduly burdensome for petitioners. Again, new 8 CFR 
214.2(h)(4)(iv)(C) does not require the submission of contracts or 
similar documents, and DHS does not anticipate that this evidence will 
be requested in all cases. In fact, DHS anticipates that in the 
majority of cases, petitioners will not be requested to submit 
contracts or similar evidence to demonstrate the existence of a bona 
fide position in a specialty occupation position. However, DHS believes 
that it is important to have clear authority in the regulations so that 
officers may request contracts, work orders, or other similar evidence 
where the petitioner has not shown that a bona fide position is 
available for the beneficiary. For example, uncorroborated statements 
about a claimed in-house project for a company with no history of 
developing projects in-house, standing alone, would generally be 
insufficient to establish the existence of a bona fide position in a 
specialty occupation. In such a case, an officer could request 
contracts or other similar evidence.
    Comment: A joint submission said that many client contracts contain 
nondisclosure provisions that prohibit disclosure of the contracts to 
third parties, and the language of the proposed regulation would put 
these petitioners in a very difficult place where they must choose 
between violating a specific contractual provision prohibiting 
disclosure or having an H-1B petition for a key

[[Page 103120]]

employee denied. The joint submission said that the implied risk of 
denial from noncompliance is made clear in the proposed rule by 
stating, ``Although a petitioner may always refuse to submit 
confidential commercial information, if it is deemed too sensitive, the 
petitioner must also satisfy the burden of proof and runs the risk of 
denial.'' \101\
---------------------------------------------------------------------------

    \101\ 88 FR 72901 & n.110 (citing Matter of Marques, 16 I&N Dec. 
314 (BIA 1997)).
---------------------------------------------------------------------------

    The company, along with an individual commenter, stated that 
documents could contain ``highly confidential information related to 
controlled technology (including those involving government contracts), 
restricted from disclosure by government authorities or subject to non-
disclosure agreements'' and would not verify the minimum educational 
requirements for the position. The company stated that employers should 
not be required to produce records ``irrelevant to the H-1B petition or 
sensitive business information when other information is available and 
sensitive information could be discoverable through the Freedom of 
Information Act,'' adding that ``the same information can also be 
provided by letters signed by an authorized company official and 
supplier representative.'' The commenter requested that ``at the very 
least'' employers be able to redact or omit sensitive information and 
that adjudicators not be able to deny H-1B petitions based on 
unavailable or inapplicable requested evidence, when the petitioner 
provides other probative evidence of the job offer and educational 
requirements of the offered position. Similarly, a trade association 
requested that USCIS clarify that, due to the highly confidential and 
sensitive nature of contracts, work orders, and similar evidence, 
redactions do not impact an officer's ability to evaluate the nature of 
the relationship between parties. Similarly, an individual commenter 
said that the proposed provisions provide no additional assurances of 
confidentiality of the documents being provided and do not address how 
contracts can be provided when the terms of the contracts specifically 
provide that they should not be disclosed to any person or agency.
    Response: DHS is aware that contracts and associated documents 
could contain confidential or sensitive information. As noted in the 
NPRM and in line with current practice, if a petitioner submits 
contracts or other requested evidence that 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. 88 
FR 72870, 72901 n.110 (Oct. 23, 2023). Alternatively, petitioners may 
submit other relevant and probative evidence, such as a letter signed 
by the end client. Petitioners will not be required to provide 
sensitive information that is irrelevant and does not show the non-
speculative nature of the beneficiary's position or the minimum 
educational requirements to perform the duties. However, as the 
petitioner bears the burden of establishing eligibility for an 
immigration benefit,\102\ it is critical that the submitted evidence 
contain all information necessary for USCIS to adjudicate the petition. 
Both the Freedom of Information Act and the Trade Secrets Act provide 
for the protection of a petitioner's confidential business information 
when it is submitted to USCIS. See 5 U.S.C. 552(b)(4), 18 U.S.C. 1905. 
Additionally, a petitioner may request pre-disclosure notification. See 
``Predisclosure Notification Procedures for Confidential Commercial 
Information.'' E.O. 12600, 52 FR 23781 (June 23, 1987).
---------------------------------------------------------------------------

    \102\ See INA 291.
---------------------------------------------------------------------------

    Comment: A few commenters voiced general concern that requests for 
documentation from petitioners and third parties would be burdensome, 
especially for smaller IT consulting firms and startups. A company and 
an advocacy group voiced concern with codifying an expectation that 
USCIS would request contracts, work orders, or similar evidence of the 
job offer due to employers being unable to provide complete copies of 
statements of work. A professional association and a law firm said the 
proposed rule would ``unfairly'' require third party employers to 
produce a higher amount of documentation to immigration authorities, 
making them more susceptible to ``broad, trivial inquisitions.''
    A trade association stated that the requirement would ignore ``the 
reality of contract law'' because parties would not want to bind 
themselves to something contractually that is not necessary to the 
performance of the object and purpose of the contract, and because it 
would create contractual obligations to and for persons that are not in 
privity with all of the contracting parties, such as the H-1B 
beneficiary. The commenter added that such a dynamic could create 
burdens for the legal system in the event a contract dispute arises. 
Both the joint submission and the trade association said that due to 
these factors, requesting contractual evidence in support of a bona 
fide job offer would be arbitrary and capricious.
    Response: DHS does not agree that this provision will be unduly 
burdensome on petitioners and does not agree that it will unfairly 
require any petitioner, including those where the beneficiary will 
provide service to a third-party, to provide a higher amount of 
documentation. Again, in all H-1B visa petition proceedings, it is the 
petitioner's burden to establish eligibility for the immigration 
benefit sought.\103\ Specifically, a petitioner must establish, among 
other things, that the beneficiary will perform services in a specialty 
occupation that requires theoretical and practical application of a 
body of highly specialized knowledge and attainment of a baccalaureate 
or higher degree in the specific specialty (or its equivalent) as a 
minimum requirement for entry into the occupation in the United States. 
Where the beneficiary will be staffed to a third party, this may be 
demonstrated by contracts or other similar evidence to establish the 
bona fide nature of the beneficiary's position and the minimum 
educational requirement(s) to perform those duties, thus ensuring that 
the beneficiary will perform services in a specialty occupation.\104\ 
While the evidence needed to satisfy the petitioner's burden may differ 
from case to case, the essential elements of what the petitioner must 
establish remain the same. Therefore, while additional evidence may be 
required in some cases, DHS does not agree that this is unfair or 
unduly burdensome.
---------------------------------------------------------------------------

    \103\ See INA sec. 291, 8 U.S.C. 1361; Matter of Simeio 
Solutions, 26 I&N Dec. 542, 549 (AAO 2015) (``It is the petitioner's 
burden to establish eligibility for the immigration benefit 
sought.''); Matter of Skirball Cultural Center, 25 I&N Dec. 799, 806 
(AAO 2012) (``In visa petition proceedings, the burden of proving 
eligibility for the benefit sought remains entirely with the 
petitioner.''); Matter of Chawathe, 25 I&N Dec. 369 (AAO 2010) (``In 
most administrative immigration proceedings, the applicant must 
prove by a preponderance of evidence that he or she is eligible for 
the benefit sought.'').
    \104\ See Defensor v. Meissner, 201 F.3d 384, 387-88 (5th Cir. 
2000) (``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 nonspecialty 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.'').
---------------------------------------------------------------------------

    As stated previously, DHS does not anticipate that this evidence 
will be requested in all cases, but there may be cases where additional 
evidence is

[[Page 103121]]

needed to establish eligibility. For example, if a petitioner claims 
that a beneficiary will be staffed to a third-party yet fails to 
provide any documentation to establish the nature of the work to be 
performed by the beneficiary or the requirements of the position, then 
corroborating evidence may be needed to demonstrate the bona fide 
nature of the beneficiary's position and the minimum educational 
requirement to perform the duties. When submitted, these documents 
should be detailed enough to provide a sufficiently comprehensive view 
of the position being offered to the beneficiary. The documentation 
should also include the minimum educational requirements to perform the 
duties. Documentation that merely sets forth the general obligations of 
the parties to the agreement, or that does not provide specific 
information pertaining to the actual work to be performed, would 
generally be insufficient. If the existing contracts or work orders do 
not provide this level of detail, or the petitioner believes that they 
are unable to provide such evidence because of confidentiality or non-
disclosure provisions, petitioners could provide other evidence, such 
as end-client letters that provide this information or similar evidence 
that petitioners think is relevant and probative. Through the proposed 
provision, which is being finalized in this rule, DHS is putting 
stakeholders on notice of the kinds of evidence that could be requested 
to establish the bona fide nature of the beneficiary's position and the 
minimum educational requirements to perform the duties.
    Furthermore, DHS disagrees that this provision is arbitrary and 
capricious. As explained above, DHS is not requesting contracts or 
similar evidence in all cases. If the petition includes sufficient 
evidence of the bona fide nature of the position and the minimum 
educational requirements to perform the job duties, USCIS officers will 
not request additional documentation in this regard. Furthermore, DHS 
is aware that some contracts may not contain minimum educational 
requirements for a position. If contracts are unavailable or do not 
include the relevant information, petitioners may submit other reliable 
evidence to demonstrate the bona fide nature of the position or the 
minimum educational requirements for the proffered position. 
Additionally, DHS is revising the regulatory language from what it 
proposed such that new 8 CFR 214.2(h)(4)(iv)(C) does not contain the 
phrase the ``terms and conditions of the beneficiary's work.'' This 
change clarifies that contracts are being requested for limited 
purposes and not for the purpose of establishing an employer-employee 
relationship.
    Comment: A few commenters stated that the proposed provision to 
``require employers to show they have existing contracts for projects'' 
would contradict DOL rules governing a job offer, which the commenters 
said converts the LCA into a de facto contract for employment.
    Response: DHS does not agree that new 8 CFR 214.2(h)(4)(iv)(C) 
requires ``employers to show they have existing contracts for 
projects'' in all cases. Rather, as noted above, it is a codification 
of DHS's existing authority to request contracts, work orders, or 
similar evidence, in appropriate cases in accordance with 8 CFR 
103.2(b) (USCIS may request additional evidence if the evidence 
submitted does not establish eligibility) and 214.2(h)(9) (``USCIS will 
consider all the evidence submitted and any other evidence 
independently required to assist in adjudication.''). While the 
reference to the LCA being converted ``into a de facto contract for 
employment'' is unclear, DHS notes that nothing in new 8 CFR 
214.2(h)(4)(iv)(C) conflicts with DOL regulations and reiterates that 
this provision is a codification of existing DHS authority. While the 
LCA does contain information regarding the proffered position and the 
employer, as well as attestations from the employer regarding, among 
other things, wages and working conditions, it does not contain 
information regarding the specific educational requirements of the 
proffered position and thus will not be sufficient to establish that a 
position is in a specialty occupation.\105\ Additional evidence may be 
needed in order to demonstrate the bona fide nature of the 
beneficiary's position and/or the minimum educational requirement to 
perform the duties, and new 8 CFR 214.2(h)(4)(iv)(C) clarifies the 
authority of USCIS to request such evidence as needed.
---------------------------------------------------------------------------

    \105\ DOL's regulation at 20 CFR 655.705(b) specifically 
recognizes that ``DHS determines. . .whether the occupation named in 
the labor condition application is a specialty occupation.''
---------------------------------------------------------------------------

    Comment: A professional association and a law firm stated that 
DHS's proposal to request contracts or similar evidence overstepped its 
congressional authority, citing the 2020 court case ITServe Alliance, 
Inc. The commenters stated that the District Court for the District of 
Columbia held that Congress did not intend to give USCIS the broad 
authority to request this type of evidence for H-1B visas under the 
American Competitiveness and Workforce Improvement Act of 1998 and 
wrote that itinerary and contract evidence for proving non-speculative 
terms and conditions of the work is ``a total contradiction'' of 
providing temporary expertise in a qualifying specialty occupation 
position. The commenter stated that terms and conditions of the 
beneficiary's daily duties ``change day-to-day to adjust to complex, 
unique situations.'' The commenters also stated that general terms and 
conditions like educational requirements are already disclosed in 
submitted documents like the Labor Condition Application and the I-129, 
Petition for a Nonimmigrant Worker. A trade association said that the 
codification of the authority to request contracts and similar evidence 
would be an unnecessary holdover from the employer-employee 
relationship requirement. The commenter, along with a legal services 
provider, cited the decision in ITServe Alliance, Inc., as 
justification for why USCIS should not finalize the provision granting 
DHS the authority to request contracts and similar evidence. The trade 
association stated that the proposed rule only makes passing mention of 
ITServe Alliance, Inc. and simply repackages prior policies. Similarly, 
a legal services provider voiced concern that the proposed provision 
would result in the revival of the guidance of the 2018 Policy Memo, 
which was overturned in ITServe Alliance, Inc. The commenter stated 
concern that USCIS would begin requesting excessive evidence of the 
contractual relationship in the ``overreaching way'' that it did before 
the 2020 court settlement, which the commenter said would overburden 
employers and their clients, and create more work for USCIS in issuing 
RFEs.
    Response: DHS disagrees with commenters' assertions that it is 
seeking to reinstate prior policy guidance from the 2018 memorandum 
Contracts and Itineraries Requirements for H-1B Petitions Involving 
Third-Party Worksites.\106\ DHS is not suggesting that a contract is 
required or that contracts will be requested to accompany every 
petition. As explained in the NPRM and above, DHS is codifying USCIS' 
authority to request contracts, work orders, or similar evidence, in 
accordance with 8 CFR 103.2(b) (USCIS may request additional evidence 
if the evidence submitted does not establish eligibility) and 
214.2(h)(9) (``USCIS will consider all the evidence submitted and

[[Page 103122]]

any other evidence independently required to assist in 
adjudication.'').\107\ With new 8 CFR 214.2(h)(4)(iv)(C), DHS is simply 
putting stakeholders on notice of the kinds of evidence that could be 
requested. While an H-1B petitioner is not required to submit contracts 
or legal agreements between the petitioner and third parties, the 
petitioner must demonstrate eligibility for the benefit sought.\108\ By 
contrast, the 2018 memorandum stated that petitioners must establish, 
among other things, that ``the petitioner has specific and non-
speculative qualifying assignments in a specialty occupation for the 
beneficiary for the entire time requested in the petition'' and that 
``the employer will maintain an employer-employee relationship with the 
beneficiary for the duration of the requested validity period.'' \109\ 
There are no such requirements in this final rule. Again, new 8 CFR 
214.2(h)(4)(iv)(C) codifies USCIS' authority to request contracts and 
similar evidence but does not require submission of such evidence in 
all cases. Similarly, new 8 CFR 214.2(h)(4)(iii)(F) codifies the 
requirement that a petitioner must demonstrate, at the time of filing, 
availability of a bona fide position in a specialty occupation as of 
the requested start date but does not require petitioners to identify 
and document the beneficiary's specific day-to-day assignments for the 
entire validity period requested.
---------------------------------------------------------------------------

    \106\ USCIS, ``Contracts and Itineraries Requirements for H-1B 
Petitions Involving Third-Party Worksites,'' PM-602-0157 (Feb. 22, 
2018) (rescinded), https://www.uscis.gov/sites/default/files/document/memos/2018-02-22-PM-602-0157-Contracts-and-Itineraries-Requirements-for-H-1B.pdf.
    \107\ See also, INA sec. 214(c)(1), 8 U.S.C. 1184(c)(1) (stating 
that an H-1B petition shall be in such form and contain such 
information as the Secretary shall prescribe); cf. Pars Equality 
Ctr. v. Blinken,--F. Supp. 3d--, 2024 WL 4700636, at *4-6 (N.D. Cal. 
Nov. 5, 2024) (observing that similar language in INA sec. 202(a), 8 
U.S.C. 1202(a), regarding visa applications confers broad discretion 
on the agency with respect to what supporting evidence is required 
(citing cases)).
    \108\ See USCIS, ``Rescission of Policy Memoranda,'' PM-602-0114 
(June 17, 2020), https://www.uscis.gov/sites/default/files/document/memos/PM-602-0114_ITServeMemo.pdf.
    \109\ USCIS, ``Contracts and Itineraries Requirements for H-1B 
Petitions Involving Third-Party Worksites,'' PM-602-0157 (Feb. 22, 
2018) (rescinded).
---------------------------------------------------------------------------

    DHS further disagrees with commenters' assertions that this 
provision conflicts with the court's findings in ITServe Alliance, Inc. 
v. Cissna, 443 F.Supp. 3d 14 (D.D.C. 2020). The district court in that 
case found, in pertinent part, that it was arbitrary and capricious for 
USCIS to interpret the itinerary requirement at 8 CFR 214.2(h)(2)(i)(B) 
to require ``contracts or other corroborated evidence of dates and 
locations of temporary work assignments for three future years.'' \110\ 
Similarly, the court found that the ``requirements that employers (1) 
provide proof of non-speculative work assignments (2) for the duration 
of the visa period is not supported by the statute or regulation and is 
arbitrary and capricious as applied to Plaintiffs' visa petitions.'' 
\111\ However, the ITServe court did not find that USCIS' general 
authority to request corroborating evidence in appropriate cases--which 
falls far short of requiring evidence of the dates and locations of 
temporary work assignments for the duration of the validity period--to 
be impermissible.
---------------------------------------------------------------------------

    \110\ 443 F.Supp. 3d at 41.
    \111\ Id. at 20.
---------------------------------------------------------------------------

    While DHS disagrees with these comments, DHS is making some changes 
to the regulatory text to allay some commenter concerns. First, DHS is 
adding regulatory text to 8 CFR 214.2(h)(4)(iii)(F) to explicitly state 
that the petitioner ``is not required to establish non-speculative day-
to-day assignments for the entire time requested in the petition.'' 
Further, DHS is not finalizing the ``terms and conditions'' language at 
new 8 CFR 214.2(h)(4)(iv)(C) as proposed in the NPRM. As noted above, 
this change clarifies that contracts are being requested for limited 
purposes and not for the purpose of establishing an employer-employee 
relationship. Also, while the definition of ``U.S. employer'' at 8 CFR 
214.2(h)(4)(ii) is being amended to codify the existing requirement 
that the petitioner have a bona fide job offer for the beneficiary to 
work within the United States, the petitioner will not be required to 
establish an employer-employee relationship with the beneficiary for 
the duration of the requested validity period. Collectively, these 
changes will aide in improving the integrity of the H-1B program while 
also highlighting that DHS does not intend to reinstate the former 
policies and practices that some courts have found invalid.
    Comment: An individual commenter and a trade association voiced 
concern that the proposed bona fide job offer provisions were 
reinstating old policies and stringent measures that could have 
detrimental effects on businesses. An individual commenter and a law 
firm stated that the provisions designed to ensure bona fide employment 
are ``individually and collectively incompatible with the entire 
practice of contracting specialized IT services,'' as they would upset 
companies' longstanding reliance interests and would be disruptive to 
the technology needs of American businesses due to the high demand for 
computer and technology specialists, which the commenters stated could 
only be met through using international talent. The commenter 
additionally said that the rule would ``revive invalidated guidance and 
rules'' that were put in place to ```target''' information-technology 
companies and would be contrary to the INA as well as arbitrary and 
capricious.
    Response: DHS does not agree that the provisions to ensure a bona 
fide job offer for a specialty occupation position, including the 
codification of USCIS' authority to request contracts or other similar 
evidence, are contrary to the INA or revive invalidated policies such 
as those addressed in the court's decision in ITServe Inc. v. Cissna 
and rescinded by USCIS in a June 17, 2020 policy memorandum.\112\ As 
discussed above and in the NPRM, new 8 CFR 214.2(h)(4)(iv)(C) is a 
codification of USCIS' existing authority to request evidence such as 
contracts and similar evidence. This provision is intended to ensure 
that there is a bona fide job offer to employ the beneficiary in a bona 
fide position in a specialty occupation, which is essential to the 
integrity of the H-1B program. Without a requirement to demonstrate 
that there is an actual position being offered, there would be no way 
for DHS to determine if the position is in a specialty occupation, and 
thus no way for DHS to determine whether the statutory definition of an 
H-1B nonimmigrant worker as someone who is ``coming temporarily to the 
United States to perform services in a specialty occupation. . . .'' 
has been met. See INA section 101(a)(15)(H)(i)(b), 8 U.S.C. 
1101(a)(15)(H)(i)(b).
---------------------------------------------------------------------------

    \112\ DHS, USCIS, ``Rescission of Policy Memoranda,'' PM-602-
0114 (June 17, 2020), available at https://www.uscis.gov/sites/default/files/document/memos/PM-602-0114_ITServeMemo.pdf
---------------------------------------------------------------------------

    This provision does not require a day-to-day accounting of the 
beneficiary's tasks, but requires that the petitioner demonstrate there 
is a bona fide offer of employment for the beneficiary and that the 
bona fide position in a specialty occupation is immediately available 
upon the requested start date on the petition. As explained above, DHS 
is making changes to be responsive to concerns raised by commenters, 
including adding regulatory text to 8 CFR 214.2(h)(4)(iii)(F) to 
explicitly state that the petitioner ``is not required to establish 
non-speculative day-to-day assignments for the entire time requested in 
the petition.'' This added regulatory text is consistent with ITServe 
Inc. v. Cissna and highlights DHS's intent to differentiate this rule 
from former policies and practices that some courts have found invalid.
    DHS further disagrees that new 8 CFR 214.2(h)(4)(iv)(C), either on 
its own or in

[[Page 103123]]

combination with the other integrity measures in this final rule, are 
``incompatible with the entire practice of contracting specialized IT 
services'' as asserted by the commenter. Again, many of these 
provisions are codifications of existing DHS authority and are intended 
to provide added clarity regarding the eligibility requirements for the 
H-1B classification and to enhance the integrity of the H-1B program. 
Further, the changes made in this final rule are applicable to all H-1B 
petitioners, not just those that provide IT services. DHS does not 
believe that codification of the existing authority to request evidence 
such as contracts or similar evidence, either by itself or in 
combination with other new integrity provisions in this final rule, 
will upset petitioners' reasonable reliance interests or disrupt 
American businesses' ability to meet technology needs.
    Comment: A trade association said it wanted to ensure that USCIS is 
aware of legitimate business reasons integral to infrastructure design 
for employees--whether they are U.S. citizens, permanent residents, or 
H-1B visa holders--to work at a client site. The commenter provided an 
example of such a situation where engineers may have to work on a 
project site where the work of an engineer would depend upon the work 
of other contractors on the project and there would be better outcomes 
if the entire team was together on site. The commenter requested that 
``USCIS contemplate these legitimate business reasons for employees, 
including H-1B visa holders, to work at a client site before it issues 
time-consuming RFEs to the employer.''
    Response: DHS is aware that there are legitimate business reasons 
for employees to work at a client site and is not limiting or 
restricting the ability of H-1B beneficiaries to perform their duties 
at third-party worksites. However, entities filing H-1B petitions that 
contemplate such scenarios must still satisfy the H-1B specialty 
occupation requirements. As explained in the NPRM and in response to 
other comments, DHS is codifying USCIS' authority to request contracts, 
work orders, or similar evidence, in accordance with 8 CFR 103.2(b). 
Similarly, as discussed further below, DHS is codifying the existing 
requirements that there be a bona fide position in a specialty 
occupation available to the beneficiary as of the start date of the 
validity period and that the petitioner have a bona fide job offer for 
the beneficiary to work within the United States. DHS does not 
anticipate that finalizing these provisions will inhibit the ability of 
H-1B beneficiaries to work at third-party worksites, since DHS is 
codifying existing authority rather than imposing new requirements with 
respect to its ability to request contracts or similar evidence and 
requiring a bona fide job offer and a bona fide position in a specialty 
occupation available to the beneficiary.
ii. Bona Fide Employment
    Comment: Several commenters voiced appreciation for the proposed 
provision to require non-speculative employment at the time of H-1B 
petition filing. A trade association stated that preventing the H-1B 
program from being used to bring in temporary foreign workers for 
speculative workforce needs helps improve the H-1B program's integrity 
and its role in meeting the immediate and specific needs of U.S. 
employers. Several commenters supported the NPRM's clarification that 
daily work assignments for the duration of the H-1B validity period are 
not required for non-speculative employment, and that DHS does not 
intend to limit H-1B validity periods based on contract, work order, or 
itinerary terms. One commenter recommended that DHS verify in the final 
rule that USCIS adjudicators cannot limit H-1B validity periods based 
on contract, work order, or itinerary terms.
    Response: DHS agrees that requiring H-1B petitioners to establish 
that there is a position in a specialty occupation available for the 
beneficiary as of the start date of the validity period as requested on 
the petition is an important measure for maintaining program integrity. 
As discussed below, a number of commenters expressed concern over the 
term ``non-speculative'' and, in response to those comments, DHS is 
replacing ``non-speculative'' with ``bona fide,'' so that new 8 CFR 
214.2(h)(4)(iii)(F) will state, in relevant part, ``[a]t the time of 
filing, the petitioner must establish that it has a bona fide position 
in a specialty occupation available for the beneficiary as of the start 
date of the validity period as requested on the petition.'' This is not 
intended to be a substantive change, but to clarify what DHS meant by 
``non-speculative'' and to emphasize that this provision is consistent 
with current policy guidance that an H-1B petitioner must establish 
that employment exists at the time of filing the petition and that it 
will employ the beneficiary in a specialty occupation.\113\ Regarding 
daily work assignments, DHS explained in the NPRM, 88 FR 72870, 72902 
(Oct. 23, 2023), and is adding to the regulatory text through this 
final rule, that petitioners are not required to establish specific 
daily work assignments through the duration of the requested validity 
period. While DHS does not intend to limit validity periods based on 
the end-date of contracts, work orders, itineraries, or similar 
documentation, DHS declines to add any limiting language through this 
rulemaking. As noted above, DHS is adding the following clarifying 
language to new 8 CFR 214.2(h)(4)(iii)(F): ``A petitioner is not 
required to establish specific day-to-day assignments for the entire 
time requested in the petition.'' As this new language makes clear that 
petitioners are not required to establish specific daily assignments, 
DHS believes it is sufficiently clear that USCIS will not limit 
validity periods based on the end-date of contracts, work orders, 
itineraries, or similar documentation.
---------------------------------------------------------------------------

    \113\ See USCIS, ``Rescission of Policy Memoranda,'' PM-602-0114 
(June 17, 2020).
---------------------------------------------------------------------------

    Comment: A few individual commenters and a company said that the 
proposed provision would work to eliminate IT staffing companies. A 
business association stated that USCIS has repeatedly confused 
speculative employment with a speculative project. The commenter said 
that employment, and the right to receive pay, are guaranteed in the H-
1B program once an employee enters the country and is available to 
start work, therefore making all H-1B employment non-speculative as a 
matter of law. The commenter added that, in contrast, all employment is 
based on speculative projects regardless of whether a product or 
consulting company is employing the H-1B beneficiary. The commenter 
recommended allowing employers to assume the risk of finding sufficient 
productive work for an employee to perform or suffer a financial 
liability if it fails to achieve this aim, in order to be more 
consistent with the INA.
    Further, the commenter claimed that the proposed rule arises out of 
an attempt to curb the already prohibited practice of ``benching 
without pay.'' The commenter stated that DOL has already established 
rules governing a bona fide job offer that does not revolve around a 
non-speculative project, and that according to DOL, a bona fide job 
offer is complete when the petition has been approved and the employee 
is available for work in the United States. The commenter said that the 
statute and regulations do not create a requirement to show actual work 
the employee would perform, and in fact creates allowance for an 
employee to do no work provided they are paid in accordance with the 
employment contract/LCA. The commenter requested

[[Page 103124]]

that DHS consider that enforcement powers for rules against benching 
without pay have been explicitly delegated to DOL since 2001, and DHS 
``has no such authority codified in the statute.''
    Response: DHS does not agree that codifying the requirement of bona 
fide employment will eliminate IT staffing companies. Nor does DHS 
agree that this provision confuses ``speculative employment'' with a 
``speculative project.'' However, to add clarity to the provision, DHS 
is replacing ``non-speculative'' with ``bona fide,'' so that new 8 CFR 
214.2(h)(4)(iii)(F) states, in relevant part, ``[a]t the time of 
filing, the petitioner must establish that it has a bona fide position 
in a specialty occupation available for the beneficiary as of the start 
date of the validity period as requested on the petition.'' This 
revision does not change the meaning or intent of the provision, which 
requires the petitioner to establish that it has a real position in a 
specialty occupation available for the beneficiary as of the start date 
of the validity period as requested on the petition. A bona fide 
position in a specialty occupation exists when the petitioner 
demonstrates the substantive nature of the specific position, such that 
a specialty occupation determination can be made, and when the 
petitioner demonstrates that the specified position in a specialty 
occupation exists within the context of its business.
    DHS recognizes that employment may be actual, but contingent on 
petition approval, and emphasizes that employment that is contingent on 
petition approval, visa issuance (when applicable), or the grant of H-
1B status may still be considered bona fide. Further, DHS disagrees 
with the commenters that requiring a bona fide position in a specialty 
occupation conflicts with DOL regulations regarding LCA requirements 
and its prohibition on benching without pay. Requiring a bona fide 
position is not the same as prohibiting benching without pay. This rule 
does not propose to change guidance on benching, which is generally 
prohibited by law to prevent foreign workers from unfair treatment by 
their employers and to ensure that the job opportunities and wages of 
U.S. workers are being protected.\114\ Nor does DHS agree with the 
commenters' assertion that obligations under the LCA such as the right 
to receive pay render ``all H-1B employment non-speculative as a matter 
of law.'' Although the LCA and DOL regulations impose obligations on 
employers, the mere existence of these obligations does not, by itself, 
satisfy all statutory requirements for H-1B eligibility. As explained 
in the NPRM, the requirement of non-speculative employment derives from 
the statutory definition of an H-1B nonimmigrant worker as someone who 
is ``coming temporarily to the United States to perform services . . . 
in a specialty occupation . . . .'' See INA section 
101(a)(15)(H)(i)(b), 8 U.S.C. 1101(a)(15)(H)(i)(b); 88 FR 72870, 72901 
(Oct. 23, 2023). Although an employer has wage obligations under the 
LCA and DOL regulations, this alone does not establish that the 
beneficiary will be performing services in a specialty occupation. DHS 
must determine whether the duties of the position normally require the 
attainment of a U.S. bachelor's or higher degree in a directly related 
specific specialty to qualify the position as a specialty occupation, 
and whether the beneficiary has the appropriate qualifications to 
perform those duties. DHS is unable to make such determinations where 
the employment itself is undetermined. The bona fide employment 
requirement is also consistent with current USCIS policy guidance that 
an H-1B petitioner must establish that employment exists at the time of 
filing the petition and that the petitioner will employ the beneficiary 
in a specialty occupation.\115\
---------------------------------------------------------------------------

    \114\ There are certain limited circumstances where benching is 
not prohibited. See INA section 212(n)(2)(C)(vii) (listing 
exceptions to the prohibition on unpaid benching).
    \115\ See USCIS, ``Rescission of Policy Memoranda,'' PM-602-0114 
(June 17, 2020).
---------------------------------------------------------------------------

    Comment: Several commenters voiced opposition to the proposed 
requirement for non-speculative employment on the grounds that it 
repeats prior DHS policies that lack basis in the INA and have been 
overturned by courts. The trade associations stated that the proposed 
rule is part of a pattern of DHS activity in contravention of court 
rulings and the INA, including a 1998 proposed rule and a 2018 Policy 
Memorandum. The commenters said that while the INA limits H-1B visas to 
those who would ``perform services . . . in a specialty occupation'' 
and while the program is not designed to allow individuals to job 
search within the United States or allow companies to recruit foreign 
workers based on entirely speculative expansion plans or workforce 
needs, the proposed rule disregards longstanding Departmental guidance 
recognizing that employment with a contracting firm may satisfy those 
requirements even without predetermined assignments to third-party 
client sites for the entire duration of the visa period. The commenters 
stated that, in regards to speculative employment, the INA only 
requires a petitioning employer to show that ``the purported employment 
is actually likely to exist for the beneficiary,'' suggesting that 
adjudicators would invariably issue requests for production, which has 
served as the basis for court decisions to invalidate previous attempts 
by DHS to demand non-speculative work assignments. A few commenters 
cited ITServe Alliance, Inc., where the court addressed challenges to 
the 2018 Policy Memo. The commenters stated that in ITServe Alliance, 
Inc., the court ruled that the Policy Memo's interpretation of 
``specialty occupation,'' which required proof of non-speculative work 
assignments for the duration of the visa, was in contravention of the 
INA, which the court stated had emphasized ``occupation'' instead of 
``job,'' which ``would likely encompass a host of jobs . . . with 
concomitant but differing job duties'' and ``[n]othing in [the INA's] 
definition requires specific and non-speculative qualifying day-to-day 
assignments for the entire time requested in the petition.'' The joint 
submission added that the ITServe Alliance, Inc. court held that 
``[w]hat the law requires, and employers can demonstrate, is the nature 
of the specialty occupation and the individual qualifications of 
foreign workers.''
    Response: As explained above, DHS is replacing ``non-speculative'' 
with ``bona fide,'' so that new 8 CFR 214.2(h)(4)(iii)(F) states, in 
relevant part, ``[a]t the time of filing, the petitioner must establish 
that it has a bona fide position in a specialty occupation available 
for the beneficiary as of the start date of the validity period as 
requested on the petition.'' DHS disagrees with the commenters that the 
requirement to establish a bona fide position at the time of filing 
lacks a basis in the INA. As explained in the NPRM, this requirement 
derives from the statutory definition of an H-1B nonimmigrant worker as 
someone who is ``coming temporarily to the United States to perform 
services . . . in a specialty occupation . . . .'' See INA section 
101(a)(15)(H)(i)(b), 8 U.S.C. 1101(a)(15)(H)(i)(b); 88 FR 72870, 72901 
(Oct. 23, 2023). Demonstrating bona fide employment is a basic, 
fundamental requirement \116\ and is essential to maintaining the 
integrity of the H-1B program. The agency has long held that the H-1B 
classification is not intended

[[Page 103125]]

as a vehicle for a person 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.\117\ This 
approach is consistent with current USCIS policy guidance that an H-1B 
petitioner must establish that employment exists at the time of filing 
the petition and that it will employ the beneficiary in a position in a 
specialty occupation.\118\
---------------------------------------------------------------------------

    \116\ Serenity Info Tech, Inc. v. Cuccinelli, 461 F.Supp.3d 1271 
(N.D. GA) (2020) (recognizing that ``[d]emonstrating that the 
purported employment is actually likely to exist for the beneficiary 
is a basic application requirement.'').
    \117\ 63 FR 30419, 30420.
    \118\ See USCIS, ``Rescission of Policy Memoranda,'' PM-602-0114 
(June 17, 2020) (citing Matter of Chawathe, 25 I&N Dec. 369 (AAO 
2010)).
---------------------------------------------------------------------------

    The requirement to establish a bona fide position at the time of 
filing does not conflict with the court's findings in ITServe Alliance, 
Inc. Importantly, DHS is not attempting to require evidence of non-
speculative employment for the entire period of time requested in the 
petition. As clearly stated in the NPRM, ``establishing nonspeculative 
employment does not mean demonstrating non-speculative daily work 
assignments through the duration of the requested validity period.'' 88 
FR 72870, 72902 (Oct. 23, 2023). Further, in response to stakeholder 
feedback, DHS is clarifying this in the regulatory text by adding, ``A 
petitioner is not required to establish specific day-to-day assignments 
for the entire time requested in the petition.'' This new regulatory 
language makes clear that DHS does not require employers to establish 
non-speculative and specific assignments for every day of the intended 
period of employment. The ITServe court found, in pertinent part, that 
the ``requirement that employers (1) provide proof of non-speculative 
work assignments (2) for the duration of the visa period is not 
supported by the statute or regulation and is arbitrary and capricious 
as applied to Plaintiffs' visa petitions.'' \119\ However, the ITServe 
court did not find that a general requirement for bona fide 
employment--which falls short of requiring non-speculative work 
assignments for the duration of the visa period--to be impermissible. 
This requirement is consistent with current USCIS policy guidance that 
the petitioner will employ the beneficiary in a specialty occupation 
position.\120\
---------------------------------------------------------------------------

    \119\ See ITServe All., Inc. v. Cissna, 443 F.Supp.3d 14 (D.D.C. 
2020).
    \120\ See USCIS, ``Rescission of Policy Memoranda,'' PM-602-0114 
(June 17, 2020) (citing Matter of Chawathe, 25 I&N Dec. 369 (AAO 
2010)).
---------------------------------------------------------------------------

    Comment: A law firm stated that the proposed provision to require 
non-speculative employment was arbitrary and capricious, as it 
contradicted 1995 policy memoranda advising that ``[t]he submission of 
[contracts between the employer and the alien work site] should not be 
a normal requirement for the approval of an H-1B petition filed by an 
employment contractor. Requests for contracts should be made only in 
those cases where the officer can articulate a specific need for such 
documentation'' and ``[t]he mere fact that a petitioner is an 
employment contractor is not a reason to request such contracts.'' The 
commenter stated that DHS did not explain whether or to what extent the 
proposed provision represents a departure from these earlier memoranda 
and that DHS failed to consider relevant reliance interests on these 
earlier memoranda.
    Response: DHS notes that the memoranda referenced by the commenter, 
a November 13, 1995 memorandum entitled ``Supporting Documentation for 
H-1B Petitions,'' and a December 29, 1995 memorandum entitled 
``Interpretation of The Term `Itinerary' Found in 8 CFR 
214.2(h)(2)(i)(B) as It Relates to the H-1B Nonimmigrant 
Classification,'' were rescinded by the 2018 memorandum ``Contracts and 
Itineraries Requirements for H-1B Petitions Involving Third-Party 
Worksites.'' \121\ Although the 2018 memorandum was itself rescinded by 
the ``Rescission of Policy Memoranda'' memorandum published on June 17, 
2020,\122\ that memorandum did not reinstate the 1995 memoranda. 
Therefore, DHS does not agree that there were any reasonable reliance 
interests in these previously rescinded memoranda that DHS failed to 
consider. DHS further disagrees that the requirement of a bona fide 
position in a specialty occupation is inconsistent with the 1995 
memoranda, and notes that the December 29, 1995 memorandum, while 
discussing the itinerary requirement, which DHS is eliminating in this 
final rule, acknowledged the requirement of non-speculative employment. 
The November 13, 1995 memorandum acknowledged that requests for 
contracts would be appropriate ``where the officer can articulate a 
specific need for such documentation,'' which is consistent with the 
codification of USCIS' authority at new 8 CFR 214.2(h)(4)(iv)(C) to 
request contracts or similar evidence where needed to establish the 
bona fide nature of the beneficiary's work and the minimum educational 
requirement to perform the duties. Further, as noted above, new 8 CFR 
214.2(h)(4)(iii)(F) is consistent with current USCIS policy guidance 
that an H-1B petitioner must establish that employment exists at the 
time of filing the petition and that it will employ the beneficiary in 
a position in a specialty occupation.\123\ DHS therefore does not agree 
that the provisions in this rule contradict previous policy or that DHS 
failed to properly consider reasonable reliance interests.
---------------------------------------------------------------------------

    \121\ USCIS, Policy Memorandum PM-602-0157, Contracts and 
Itineraries Requirements for H-1B Petitions Involving Third-Party 
Worksites (Feb. 22, 2018) (rescinded), https://www.uscis.gov/sites/default/files/document/memos/2018-02-22-PM-602-0157-Contracts-and-Itineraries-Requirements-for-H-1B.pdf.
    \122\ USCIS, Policy Memorandum PM-602-0114, Recission of Policy 
Memoranda (June 17, 2020), https://www.uscis.gov/sites/default/files/document/memos/PM-602-0114_ITServeMemo.pdf.
    \123\ See USCIS, ``Rescission of Policy Memoranda,'' PM-602-0114 
(June 17, 2020) (citing Matter of Chawathe, 25 I&N Dec. 369 (AAO 
2010)).
---------------------------------------------------------------------------

    Comment: Some commenters, including a company, a form letter 
campaign, a joint submission, and a trade association, supported the 
NPRM's clarification that daily work assignments for the duration of 
the H-1B validity period are not required for non-speculative 
employment, and that DHS does not intend to limit H-1B validity periods 
based on contract, work order, or itinerary terms.
    Response: DHS is not attempting to require evidence of non-
speculative employment for the entire time requested in the petition. 
As clearly stated in the NPRM, ``establishing nonspeculative employment 
does not mean demonstrating non-speculative daily work assignments 
through the duration of the requested validity period.'' 88 FR 72870, 
72902 (Oct. 23, 2023). DHS does not propose to require employers to 
establish non-speculative and specific assignments for every day of the 
intended period of employment.'' In response to these comments, and to 
provide further clarification of the requirements with respect to 
establishing non-speculative employment, DHS is clarifying the 
regulatory text by adding, ``A petitioner is not required to establish 
specific day-to-day assignments for the entire time requested in the 
petition.'' See new 8 CFR 214.2(h)(4)(iii)(F). As stated in response to 
other comments, DHS is also replacing ``non-speculative'' with ``bona 
fide'' in this provision to add clarity.
    Comment: A company noted its concern that the NPRM preamble 
references non-speculative employment, yet the proposed rule requires a 
non-speculative position. The commenter also stated that, ``the NPRM 
confirms daily work assignments for the duration of the H-1B validity 
period are not required for non-speculative

[[Page 103126]]

employment.'' The commenter encouraged DHS to conform the final rule's 
language to the NPRM preamble, requiring ``non-speculative employment'' 
at the time of filing, reasoning that one offered position should not 
be required for H-1B petition approval, as the petitioner can 
reasonably sponsor H-1B employment for a future or contingent position. 
The commenter stated that sponsored U.S. employment is often the same 
as foreign employment for employees transferring from related entities 
abroad, whereas the U.S. position may be contingent on changing 
business, management, and contract needs. The company added that the 
final rule should account for additional contingencies under non-
speculative U.S. employment as employers can file for these non-
speculative contingent positions without harming H-1B program 
integrity.
    Response: The regulatory text will be finalized to state: ``At the 
time of filing, the petitioner must establish that it has a bona fide 
position in a specialty occupation available for the beneficiary as of 
the start date of the validity period as requested on the petition.'' 
Although DHS disagrees with the commenter that there is a discrepancy 
between the NPRM preamble referencing non-speculative employment and 
the proposed regulatory text requiring a non-speculative position, DHS 
is replacing ``non-speculative'' with ``bona fide'' to add clarity.
    To determine whether the H-1B worker will perform services in a 
specialty occupation as required by statute, USCIS must examine the 
nature of the services the beneficiary will perform in the offered 
position. Where the proposed position is undetermined, USCIS is unable 
to properly analyze and determine whether the position is a specialty 
occupation, and the petitioner will not be able to establish the nature 
of the offered position. Undetermined employment where there is no 
defined position precludes the agency from ascertaining whether the 
duties of the offered position normally require the attainment of a 
U.S. bachelor's or higher degree in a directly related specific 
specialty to qualify the position as a specialty occupation, and 
whether the beneficiary has the appropriate qualifications to perform 
those duties. Conversely, a bona fide position in a specialty 
occupation exists when the petitioner demonstrates the substantive 
nature of the specific position, such that a specialty occupation 
determination can be made, and when the petitioner demonstrates that 
the specified position in a specialty occupation exists within the 
context of its business.
    Regarding the requirement for day-to-day work assignments, as 
stated in the NPRM, ``DHS does not require a petitioner to identify and 
document the beneficiary's specific day-to-day assignments.'' 88 FR 
72902 (Oct. 23, 2023). To make this point clear, DHS is adding the 
following regulatory text to new 8 CFR 214.2(h)(4)(iii)(F): ``A 
petitioner is not required to establish specific day-to-day assignments 
for the entire time requested in the petition.'' DHS acknowledges that 
a beneficiary's daily work assignments may vary and 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 specialty 
occupations.'' ITServe All., Inc. v. Cissna, 443 F. Supp. 3d 14, 39 
(D.D.C. 2020). Bona fide employment under new 8 CFR 214.2(h)(4)(iii)(F) 
is sufficiently broad to allow for reasonable variations and changes to 
the beneficiary's daily work assignments, provided those variations and 
changes remain consistent with the petitioner's job description and 
other supporting evidence. Ultimately, what new 8 CFR 
214.2(h)(4)(iii)(F) requires is for the petitioner to adequately 
demonstrate what duties the beneficiary will perform in the proffered 
position in order to establish that the beneficiary will, in fact, be 
employed in a specialty occupation position.\124\ See ITServe All., 
Inc. v. Cissna, 443 F. Supp. 3d 14, 39 (D.D.C. 2020) (``What the law 
requires, and employers can demonstrate, is the nature of the specialty 
occupation and the individual qualifications of foreign workers.'').
---------------------------------------------------------------------------

    \124\ See ITServe All., Inc. v. Cissna, 443 F. Supp. 3d 14, 39 
(D.D.C. 2020) (``What the law requires, and employers can 
demonstrate, is the nature of the specialty occupation and the 
individual qualifications of foreign workers.'').
---------------------------------------------------------------------------

    DHS disagrees with the comment that an H-1B specialty occupation 
worker may have a petition filed for a ``future or contingent'' 
position, where ``future or contingent'' means that the beneficiary's 
job duties are undetermined and dependent on changing business, 
management, and contract needs. DHS wishes to emphasize that 
speculative employment should not be confused with employment in a 
position that is contingent on petition approval, visa issuance (when 
applicable), or the grant of H-1B status. DHS recognizes that 
employment in a specific position may be actual, but contingent on 
petition approval, visa issuance, or the beneficiary being granted H-1B 
status. However, the petition approval process should not be confused 
with the requirement that the beneficiary's employment be in a bona 
fide position in a specialty occupation. Employment that is contingent 
upon petition approval should not be confused as permitting petitions 
for future and contingent positions that lack the specificity or detail 
needed to establish eligibility as a specialty occupation.
    Comment: A commenter requested additional discussion on the 
proposed provision. An attorney writing as part of a form letter 
campaign stated that DHS did not provide clear guidance on what it 
expects beyond what is already generally submitted with H-1B petitions 
to establish the employment is non-speculative. The campaign voiced 
concern that this lack of specificity would leave the H-1B petitioner 
with the burden of guessing what it needs to prepare, taking up more 
administrative time beyond what it is already required in preparing H-
1B petitions. The campaign urged DHS to define required evidence in 
future proposals. Similarly, a law firm requested that DHS provide a 
definition of ``speculative employment'' to provide petitioners and 
adjudicators with further guidance. A couple of commenters similarly 
stated that the non-speculative employment requirement failed to 
provide articulable standards against which petitioning employers can 
plan to provide enough evidence to predictably satisfy adjudicators. 
The commenters requested that, at a minimum, DHS provide further 
clarification for the ``non-speculative position'' requirement, and 
requested that DHS recognize that a petitioning employer can satisfy 
the requirement via a ``wide breadth of evidence.'' A joint submission 
and a law firm stated that the absence of guidance on what is required 
to establish non-speculative employment raises concerns that the 
regulatory provision may result in RFEs and NOIDs with open-ended 
requests for documents that are difficult for petitioners to provide. 
The joint submission said that there was a lack of explanation for how 
adjudicators would determine that a qualifying, ``non-speculative 
position'' exists without requiring the same evidence of ``specific and 
nonspeculative qualifying assignments'' or an ``itinerary,'' which the 
ITServe Alliance, Inc. court held USCIS must not require. A trade 
association and a business association voiced concern that the NPRM's 
lack of specific guidance on acceptable documentation provides no 
opportunity for the regulated public to provide constructive feedback 
on the practicality of such documentation for employers,

[[Page 103127]]

and recommended that the rule include a non-exhaustive list of 
acceptable documentation.
    Response: While DHS does not agree that the requirement of non-
speculative employment lacks clarity or specificity, in response to 
this and several other comments, DHS is revising this provision to 
replace ``non-speculative'' with ``bona fide.'' A bona fide position in 
a specialty occupation exists when the petitioner demonstrates the 
substantive nature of the specific position, such that a specialty 
occupation determination can be made, and when the petitioner 
demonstrates that the specified position in a specialty occupation 
exists within the context of its business. The agency has 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.\125\ Examples 
provided in that proposed rule are also relevant here. Specifically, 
the 1998 proposed rule noted that the H-1B classification was not 
intended to allow individuals ``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.'' \126\ In such cases, the actual employment would be 
undetermined and, therefore, speculative. By contrast, where a position 
is bona fide, the petitioner should be able to establish, through the 
submission of evidence such as evidence relating to its past employment 
practices and evidence relating to its employment plans for the 
beneficiary, that the beneficiary will, in fact, commence work in a 
specialty occupation immediately upon admission in H-1B 
classification.\127\
---------------------------------------------------------------------------

    \125\ See ``Petitioning Requirements for the H Nonimmigrant 
Classification,'' 63 FR 30419, 30420 (June 4, 1998).
    \126\ See ``Petitioning Requirements for the H Nonimmigrant 
Classification,'' 63 FR 30419, 30420 (June 4, 1998).
    \127\ See ``Petitioning Requirements for the H Nonimmigrant 
Classification,'' 63 FR 30419, 30420 (June 4, 1998).
---------------------------------------------------------------------------

    Demonstrating bona fide employment in a specialty occupation is a 
basic, fundamental requirement \128\ that is derived from the statutory 
definition of an H-1B nonimmigrant as someone who is ``coming 
temporarily to the United States to perform services . . . in a 
specialty occupation . . . .'' See INA section 101(a)(15)(H)(i)(b), 8 
U.S.C. 1101(a)(15)(H)(i)(b), and is essential to maintaining the 
integrity of the H-1B program. Although the requirement of bona fide 
employment is longstanding, DHS acknowledges that since the issuance of 
USCIS Policy Memorandum PM-602-0114, ``Rescission of Policy Memoranda'' 
in July 2020, it has not always been the practice of USCIS to require 
petitioners to submit evidence beyond the petitioner's own description 
of the position to establish that there is a bona fide position in a 
specialty occupation available for the beneficiary as of the start date 
of the requested validity period. DHS further acknowledges that 
codification of the requirement to establish a bona fide position in a 
specialty occupation may result in petitioners providing more evidence 
than in recent years. However, with this rule DHS is providing the 
transparency necessary for petitioners to meet their burden to 
demonstrate eligibility with the information they provide in their 
petitions to demonstrate the existence of a bona fide position in a 
specialty occupation that is available to the beneficiary. Although DHS 
is codifying its authority and clarifying USCIS' current practice, the 
requirement of a bona fide position in a specialty occupation is not 
new. The evidence used to demonstrate the existence of the bona fide 
position in a specialty occupation will vary based on the business of 
the petitioner and the specific position being offered. In some cases, 
the nature of the petitioner's business and the nature of the offered 
job will be credible without further explanation. In other cases, the 
evidence provided may not sufficiently explain how the petitioner, as 
it describes its own business, would need a worker in the offered 
position. Thus, the petitioner would not have met their burden of proof 
and would require the petitioner to explain and provide additional 
evidence of how it is able to offer employment in the specified 
specialty occupation position within the context of its business. In 
the later instance, for example, the petitioner could demonstrate that 
it has a bona fide position available through contracts, statements of 
work, master service agreements, end client letters, and any other 
documentation that shows that there is a bona fide position available 
on the start date requested on the petition. As explained in the NPRM, 
petitioners will not be required to demonstrate non-speculative daily 
work assignments or document the beneficiary's specific day-to-day 
assignments. 88 FR 72870, 72902 (Oct. 23, 2023). Additionally, in order 
to further clarify this point, DHS is revising the proposed regulatory 
text to explicitly state that the petitioner is not required to 
establish specific day-to-day assignments for the entire time requested 
in the petition.
---------------------------------------------------------------------------

    \128\ Serenity Info Tech, Inc. v. Cuccinelli, 461 F.Supp.3d 1271 
(N.D. GA) (2020) (recognizing that ``[d]emonstrating that the 
purported employment is actually likely to exist for the beneficiary 
is a basic application requirement.'').
---------------------------------------------------------------------------

    Moreover, because this requirement is fundamental to demonstrating 
eligibility for H-1B nonimmigrant classification, it is reasonable to 
require petitioners to provide evidence of a bona fide position in a 
specialty occupation.
    Comment: In the case of proving non-speculative employment when a 
beneficiary is staffed to a third-party worksite, an individual 
commenter and a law firm stated that the proposed rule offers no 
guidance on how USCIS would adjudicate an application if the petitioner 
does not provide proof of specific third-party assignments for the 
duration of the visa period.
    The commenters stated that DHS should affirm that a petitioner's 
description of the beneficiary's position may show the position is non-
speculative, in line with the guidance in the 1995 Policy Memo stating 
that ``in the case of an H-1B petition filed by an employment 
contractor, a general statement of the alien's proposed or possible 
employment is acceptable . . . [a]s long as the officer is convinced of 
the bona fides of the petitioner's intentions.'' The commenters also 
stated that another option would be DHS clarifying that evidence of a 
consistent need for high-skilled workers in the given specialty may 
demonstrate that the position is ``non-speculative,'' adding that, in 
such circumstances, the need for the position is proven through 
historic evidence and satisfies the INA's only requirement that the 
petitioning employer ``[d]emonstrat[e] that the purported employment is 
actually likely to exist.'' The commenters stated that, consistent with 
the longstanding business models IT service providers have utilized, 
the mere fact that the petitioning employer cannot identify at the time 
of filing every third-party client for whom the beneficiary would 
provide services does not render the offer ``illegitimate''. The 
commenters said that it is the historic occurrence of labor shortages 
in the IT space and the use of IT services companies to address those 
needs that supports any such position's legitimacy.
    Response: As stated above, the requirement for bona fide employment 
derives from the statutory definition of an H-1B nonimmigrant worker as

[[Page 103128]]

someone who is ``coming temporarily to the United States to perform 
services . . . in a specialty occupation'' at INA section 
101(a)(15)(H)(i)(b), 8 U.S.C. 1101(a)(15)(H)(i)(b). 88 FR 72870, 72901 
(Oct. 23, 2023). Where the proposed position is speculative, the 
petitioner will not be able to establish the nature of the offered 
position and USCIS will not be able to determine if the position is a 
specialty occupation. In the NPRM, DHS explained that petitioners will 
not be required to demonstrate non-speculative daily work assignments 
through the duration of the requested validity period. 88 FR 72870, 
72902 (Oct. 23, 2023). This is equally true for third-party placement--
new 8 CFR 214.2(h)(4)(iii)(F) will not require a petitioner to provide 
proof of specific third-party assignments for the duration of the 
requested period and, as noted above, DHS is adding that clarification 
to the regulatory text in this final rule. Given the discussion in the 
NPRM, this final rule, and the inclusion of this language in the final 
regulatory text, DHS believes it is clear that the bona fide employment 
requirement does not oblige a petitioner to ``identify at the time of 
filing every third-party client for whom the beneficiary would provide 
services.'' Rather, a petitioner must demonstrate, at the time of 
filing, availability of bona fide employment in a specialty occupation 
as of the requested start date. That is, the petitioner must show that 
the employment in a specialty occupation is ``actually likely to exist 
for the beneficiary'' \129\ as of the requested start date.
---------------------------------------------------------------------------

    \129\ Serenity Info Tech. v. Cuccinelli 461 F.Supp.3d 1271.
---------------------------------------------------------------------------

    DHS declines to state categorically that a description of the 
position will, in all cases, be sufficient to establish that a position 
is non-speculative and again notes that the 1995 memoranda to which the 
commenters cite were rescinded in 2018.\130\ Further, DHS disagrees 
that a historic occurrence of labor shortages and consistent need for 
workers can act as a substitute for showing that a position is bona 
fide, as such general information would not necessarily establish the 
existence of a bona fide position with respect to a specific petitioner 
and beneficiary. As stated in the NPRM, 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 conduct 
their business, subject to annual numerical limitations, while 
protecting the wages and working conditions of U.S. workers. 88 FR 
72870, 72901 (Oct. 23, 2023).
---------------------------------------------------------------------------

    \130\ USCIS, ``Rescission of Guidance Regarding Deference to 
Prior Determinations of Eligibility in the Adjudication of Petitions 
for Extension of Nonimmigrant Status,'' PM-602-0151 (Oct. 23, 2017), 
https://www.uscis.gov/sites/default/files/document/memos/2018-02-22-PM-602-0157-Contracts-and-Itineraries-Requirements-for-H-1B.pdf.
---------------------------------------------------------------------------

    Comment: A trade association and a joint submission said that the 
non-speculative work requirement is overly broad and fails to 
acknowledge the challenging reality faced by modern businesses that 
cannot conduct precise workforce planning months in advance in a 
rapidly evolving economic environment.
    A company and a trade association stated that the standard duration 
of contracts in the IT consulting industry is 6 months long; and, even 
if an employer had a contract for the beneficiary's services at the 
time of filing, it would expire by the time the employee was able to 
enter the country on their initial H-1B visa. The commenters said that 
for this reason, establishing a requirement to show non-speculative 
projects over a 3-year visa period would be unworkable for petitioners. 
The trade association said that given the low odds of lottery 
selection, it is not possible for consulting companies to negotiate and 
secure contracts for the services of an employee that they have no 
guarantee of receiving.
    Response: Under new 8 CFR 214.2(h)(4)(iii)(F), DHS will not require 
employers to establish non-speculative and specific assignments for 
every day of the intended period of employment. Rather, a petitioner 
must demonstrate, at the time of filing, availability of a bona fide 
position as of the requested start date. In response to stakeholder 
feedback, DHS is clarifying this in the regulatory text by adding, ``A 
petitioner is not required to establish specific day-to-day assignments 
for the entire time requested in the petition.'' As noted in other 
comment responses, DHS is also replacing ``non-speculative'' with 
``bona fide'' for clarity.
    As DHS discussed in the NPRM, 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 conduct their 
business, subject to annual numerical limitations, while protecting the 
wages and working conditions of U.S. workers. 88 FR 72870, 72901 (Oct. 
23, 2023). New 8 CFR 214.2(h)(4)(iii)(F) is consistent with current 
USCIS policy guidance that an H-1B petitioner must establish that 
employment exists at the time of filing the petition and that it will 
employ the beneficiary in a specialty occupation.
    Comment: A trade association said that the proposed rule's narrow 
range of evidence of a non-speculative position reaches beyond 
statutory requirements to create unnecessary evidentiary restrictions 
on petitioners and employers. The commenter stated that while they 
recognize that the establishment of non-speculative employment does not 
necessarily require the demonstration of non-speculative work 
assignments, most adjudicators are unable to make the necessary 
distinction between speculative employment and speculative work 
assignments, particularly in cases involving third-party placements. A 
commenter added that the impact of the non-speculative work requirement 
would have negative policy consequences for American businesses, 
inconsistent with the Administration's stated goals of fueling 
innovation in technology industries and maintaining a globally premier 
workforce. A trade association voiced concern that the non-speculative 
work requirement was extremely broad and could cause unintended 
negative consequences for H-1B workers.
    Response: DHS disagrees with the commenter that new 8 CFR 
214.2(h)(4)(iii)(F) allows for only a ``narrow range of evidence'' to 
establish that a petitioner has non-speculative employment available. 
In fact, new 8 CFR 214.2(h)(4)(iii)(F) does not impose any limitations 
on the evidence a petitioner may provide; it simply codifies the 
requirement, consistent with current USCIS policy, that the petitioner 
must establish that it has a bona fide position available as of the 
start date of the validity period requested on the petition. As noted 
in other comment responses, DHS is replacing ``non-speculative'' with 
``bona fide'' to add clarity to this provision. DHS also disagrees that 
USCIS adjudicators will be unable to distinguish between speculative 
employment and speculative work assignments, as DHS stated clearly in 
the NPRM that petitioners will not be required to establish non-
speculative and specific assignments for every day of the intended 
period of employment. 88 FR 72870, 72902 (Oct. 23, 2023). Rather, a 
petitioner must demonstrate, at the time of filing, availability of a 
bona fide position in a specialty occupation as of the requested start 
date. Further, as noted above, in response to stakeholder feedback, DHS 
is clarifying this in the regulatory text by adding, ``A petitioner is 
not required to establish specific day-to-day

[[Page 103129]]

assignments for the entire time requested in the petition.'' DHS also 
disagrees that the provision is ``extremely broad'' such that it may 
have unintended negative consequences for workers. While the 
commenters' concern is not entirely clear, DHS recognizes that 
employment may be bona fide even though the beneficiary does not begin 
working on the requested start date. However, if DHS determines that 
there was a lack of a bona fide position in a specialty occupation as 
of the requested start date at the time of filing, or that the 
petitioner did not have a bona fide job offer for the beneficiary, then 
the petition may be denied or revoked on that basis. Finally, DHS 
disagrees that codifying the requirement of a bona fide position will 
harm American businesses. To the contrary, 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 conduct 
their business, subject to annual numerical limitations, while 
protecting the wages and working conditions of U.S. workers.
    Comment: A commenter and a law firm voiced concern that DHS does 
not explain whether, or to what extent, it is changing positions with 
respect to its historical guidance on how to demonstrate bona fide 
employment or consider relevant reliance interests. The commenters 
stated that the new proposed rule is arbitrary and capricious for its 
failure to acknowledge and explain the departure. A few commenters said 
the proposed rule fails to consider or analyze any reliance interests--
including those held by consulting firms whose business models have 
long depended in part on sourcing high-skilled foreign labor for 
American businesses and businesses that have relied on the H-1B program 
to help alleviate shortages in high-skilled domestic labor in the IT 
space.
    Response: As stated above, the requirement of bona fide employment 
codified at new 8 CFR 214.2(h)(4)(iii)(F) derives from the statutory 
definition of an H-1B nonimmigrant worker as someone who is ``coming 
temporarily to the United States to perform services . . . in a 
specialty occupation . . . .'' INA section 101(a)(15)(H)(i)(b), 8 
U.S.C. 1101(a)(15)(H)(i)(b); 88 FR 72870, 72901 (Oct. 23, 2023). This 
is not a ``departure,'' or a new requirement but rather a codification 
of a longstanding requirement.\131\ A bona fide position in a specialty 
occupation exists when the petitioner demonstrates the substantive 
nature of the specific position, such that a specialty occupation 
determination can be made, and when the petitioner demonstrates that 
the specified position in a specialty occupation exists within the 
context of its business. In response to comments and stakeholder 
feedback, DHS is replacing ``non-speculative'' with ``bona fide'' to 
add clarity to this provision. Again, DHS reiterates that this 
provision simply requires a petitioner to demonstrate, at the time of 
filing, availability of a bona fide position in a specialty occupation 
as of the requested start date. This is different from requiring 
petitioners to demonstrate specific, day-to-day work assignments for 
the beneficiary for the duration of the requested validity period, as 
may have been common practice prior to the July 2020 recission of the 
2018 Contracts and Itineraries memorandum.
---------------------------------------------------------------------------

    \131\ USCIS, ``Rescission of Policy Memoranda'' PM-602-0114 
(Jun. 17, 2020), https://www.uscis.gov/sites/default/files/document/memos/PM-602-0114_ITServeMemo.pdf (stating ``The petitioner has the 
burden of proof to establish that employment exists at the time of 
filing and it will employ the beneficiary in the specialty 
occupation.''). See also ``Petitioning Requirements for the H 
Nonimmigrant Classification,'' 63 FR 30419, 30419-30420 (June 4, 
1998) (proposed rule explaining 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).
---------------------------------------------------------------------------

    DHS acknowledges that, since the issuance of the July 2020 USCIS 
Policy Memorandum PM-602-0114, ``Rescission of Policy Memoranda'', it 
has not always been the practice of USCIS to require petitioners to 
submit documentary evidence to establish that there is a position in a 
specialty occupation available for the beneficiary as of the start date 
of the validity period as requested on the petition. As noted above, 
DHS is replacing ``non-speculative'' with ``bona fide'' for added 
clarity in the provision. The bona fide position requirement derives 
from the statutory definition of an H-1B worker and is generally 
consistent with current USCIS policy guidance that an H-1B petitioner 
``has the burden of proof to establish that employment exists at the 
time of filing and it will employ the beneficiary in the specialty 
occupation.'' Specifically with respect to statutory requirements, as 
stated above, the requirement of a bona fide position derives from the 
statutory definition of an H-1B nonimmigrant worker as someone who is 
``coming temporarily to the United States to perform services . . . in 
a specialty occupation . . . .'' INA section 101(a)(15)(H)(i)(b), 8 
U.S.C. 1101(a)(15)(H)(i)(b); 88 FR 72870, 72901 (Oct. 23, 2023). Prior 
to the July 2020 policy memorandum, DHS (and previously INS) long held 
and communicated the view that speculative employment is not permitted 
in the H-1B program. Thus, DHS does not agree that codification of the 
bona fide position requirement at 8 CFR 214.2(h)(4)(iii)(F) impairs any 
reasonable reliance interests. To the extent that petitioners had any 
such reliance interests in the continuation of the recent practice to 
not require evidence of a bona fide position in a specialty occupation, 
DHS believes that these interests are outweighed by DHS's interest in 
maintaining the integrity of the H-1B program and in achieving a key 
goal of the H-1B program, which is to help U.S. employers obtain the 
skilled workers they need to conduct their business, subject to annual 
numerical limitations, while protecting the wages and working 
conditions of U.S. workers.
    Comment: A company and a trade association stated that once in the 
country and available for work, consulting company employers may find 
it economically advantageous to swap out employees assigned to a given 
project, which the commenter said is allowed by statute and DOL 
regulations, but added that a non-speculative project requirement would 
prohibit companies from changing projects, which would impede smart 
financial decisions and ignore petitioning consulting companies' long-
term need for particular skill sets--focusing exclusively on the end 
client's requirements for a short-term project.
    Response: The statute explicitly requires that H-1B classification 
be approved only for positions that are specialty occupations. Although 
companies may find it economically advantageous to move employees 
around, if those employees are in H-1B status, the company must 
continue to comply with the relevant statutory and regulatory 
requirements. These requirements include demonstrating that the 
petitioner is offering bona fide employment in a specialty occupation 
position and that the beneficiary is qualified for the offered 
position. DHS did not propose to require non-speculative projects for 
the entire validity period requested. Rather as noted in the proposed 
rule, the petitioner must demonstrate that, at the time of filing, it 
has a non-speculative position in a specialty occupation available for 
the beneficiary as of the start date of the validity period as 
requested on the petition. In response to stakeholder feedback, DHS is 
replacing ``non-speculative'' with ``bona fide'' in this provision to 
add clarity. This new regulation will require the petitioner to

[[Page 103130]]

specify the duties the beneficiary will be performing as of the start 
date of the petition, although it will not require the petitioner to 
identify every prospective project at the time of filing. However, if 
the beneficiary will be placed on projects with different minimum 
requirements, or with a different third party, then the new project and 
the new third party's requirements may impact the specialty occupation 
determination. The petitioner is free to place the beneficiary at a new 
project or new third-party site, as long as the petitioner complies 
with DOL and DHS requirements to file new or amended LCAs and 
petitions.
iii. LCA Properly Corresponds With the Petition
    Comment: A company voiced general support for DHS's proposal to 
codify its authority to ensure the LCA supports and properly 
corresponds with the accompanying H-1B petition and recognized that DHS 
should consider the position offered and its relationship to the 
occupation listed in the LCA. A professional association stated that 
DHS should verify the accuracy of H-1B LCA information. A professional 
association agreed that DHS both has the authority and the obligation 
to ensure that any DOL-approved LCA actually supports the H-1B 
petition, and added that it therefore wholly supports the NPRM's 
addition of the proposed text. The commenter stated that for the labor 
certification process to serve its intended function of protecting U.S. 
workers, DHS must impose consequences on employers that violate it. The 
commenter said that particularly with respect companies that use 
collective bargaining agreement (CBA) wage rate, USCIS can and should 
be empowered to ensure that the resulting certifications truly support 
the petition and hold employers accountable for any false statements or 
misrepresentations in LCAs.
    Response: DHS agrees with these commenters that it is appropriate 
for DHS to ensure that the LCA supports and properly corresponds with 
the accompanying H-1B petition and is finalizing the text proposed in 
the NPRM through this rulemaking. DHS acknowledges the commenter's 
concern about CBA wage rates and agrees that petitioners must attest to 
the truthfulness and accuracy of the information provided on LCAs, 
including the use of an appropriate wage source. If the facts presented 
in the H-1B petition or the information on the LCA was inaccurate, 
fraudulent, or includes a misrepresentation of a material fact, the 
petition may be denied or, if approved, the petition approval may be 
revoked. See 8 CFR 214.2(h)(10)(ii) and (h)(11)(iii)(A)(2).
    Comment: Several commenters stated that the proposed provision 
establishing DHS's authority and obligation to determine whether a 
certified LCA supports and properly corresponds with the H-1B petition, 
separate and apart from the DOL's power to certify the LCA, would 
distort the DOL regulations, and insert a substantive component over 
LCAs that exceeds DHS's authority. The trade associations said that 
USCIS lacks the expertise to evaluate the LCA and that although the 
preamble states that USCIS would not supplant DOL's responsibility with 
respect to wage determinations, USCIS could exceed its authority by 
reassessing DOL's determinations in the LCA. The joint submission added 
that the proposed regulation appears to require--or at least 
encourage--USCIS adjudicators to go much further than simply carrying 
out their authorities under existing DOL regulations by performing 
detailed analyses of each element of an LCA and potentially reject LCAs 
altogether if the adjudicator does not agree with one of the many 
elements of the underlying LCA. A few commenters said that the LCA 
requirement, as framed in the INA and implemented by DOL, is intended 
only to protect U.S. and foreign workers, offering grounds for recourse 
in case, for example, the petitioner pays the beneficiary below the 
prevailing wage. The commenters added that Congress did not create the 
LCA requirement to offer substantive proof of a bona fide position in a 
specialty occupation, and that such a proposal exceeds DHS's statutory 
mandate. Similarly, a trade association said that the INA does not 
authorize DHS to take any action with respect to the LCA other than 
confirming it ``corresponds'' to the petition, and that DOL has the 
responsibility to verify the LCA under DOL regulations. The commenter 
added that an LCA does not contain sufficient information to assist an 
adjudicator's determination of a specialty occupation, such as the job 
duties and educational requirements, that DOL's traditional and 
separate role reviewing and enforcing LCAs is already effective, and 
that an expansion of DHS authority to perform similar activities is 
unwarranted. Several commenters requested that DHS reissue the proposal 
or insert a statement in the final rule clarifying that USCIS can do no 
more regarding the LCA than simply confirm that it corresponds to the 
position described in the H-1B petition, and cannot undermine DOL's 
determination or in any way re-adjudicate the LCA. A few commenters 
requested that USCIS more clearly state in the rule that the wage level 
in the certified LCA is not solely determinative of whether the 
position is a specialty occupation and that USCIS would not supplant 
DOL's responsibility with respect to wage determinations. One commenter 
said that practitioners have noted USCIS nitpicking SOC codes to deny 
petitions, noting that it is DOL, not USCIS, which determines questions 
of wage level and other matters under 20 CFR 655.705(a).
    A joint submission stated that DOL solely possesses the 
jurisdiction to verify wage levels and representations listed in an 
LCA, and that there is no legitimate purpose for USCIS to investigate 
or otherwise examine such information if USCIS does not intend to 
investigate an employer's LCA practices. The commenters said that to 
determine whether an LCA ``corresponds'' with an H-1B petition, USCIS 
need only verify that the certified LCA and the petition at issue do 
not materially conflict, but added that with the proposed examination 
of the ``wage level (or an independent authoritative source 
equivalent),'' USCIS appears to go further than mere comparison and 
venture into investigations in the domain of DOL. The commenter wrote 
that the required wage is evident on the face of the LCA and reveals 
whether the certified LCA comports with the offered salary, but that 
the prevailing wage level itself is part of the prevailing wage 
determination process, which is exclusively within DOL authority. The 
commenter added that the prevailing wage determination is ``in no way'' 
indicative of the duties the beneficiary would perform, and an 
Occupational Employment and Wage Statistics (OEWS) Level 1 wage 
determination is wholly consistent with the definition of a specialty 
occupation. The commenter stated that because of this, inquiring into 
the wage level itself is to examine whether and how the employer 
properly applied DOL regulations and guidance, and it is precisely this 
authority that INA sec. 101(a)(H) invests in DOL.
    A few commenters said that review of an LCA is limited by design, 
with DOL certifying an LCA so long as it is complete and not obviously 
inaccurate and enforcing the agreement's terms through a post-hoc 
complaint process. The commenters stated that, in that way, DOL 
recognized ``that Congress . . . intended to provide greater protection 
than under prior law for U.S. and foreign workers without interfering 
with an employer's ability to obtain the H-1B workers it needs on a 
timely basis.'' The commenters noted that DOL

[[Page 103131]]

regulations recognized that other agencies have discrete obligations 
vis-[agrave]-vis an LCA, among them being ``DHS accepts the employer's 
petition (DHS Form I-129) with the DOL-certified LCA attached. DHS 
determines whether the petition is supported by an LCA which 
corresponds with the petition.'' The commenters added that DOL 
regulations further reiterate DHS's general authority to determine 
whether the occupation listed, and the nonimmigrant's qualifications 
satisfy the statutory requirements for an H-1B visa. The commenters 
stated that, under a plain reading of the regulation, and consistent 
with the INA's delegation of LCA authority to DOL, DHS's role is 
limited to ensuring the petition (1) is predicated on--or ``is 
supported by''--a certified LCA; and (2) the LCA ``corresponds with'' 
the petition. However, the commenters said that the proposal adds a 
substantive component to DHS's review of a DOL-certified LCA that is 
absent from the DOL regulation and is contrary to the INA. The 
commenters said that this provision represents an unexplained and 
unacknowledged change in policy guidance following the rescission of 
the 2018 Contracts and Itineraries memo and renders the provision 
arbitrary and capricious.
    Response: DHS disagrees that ensuring that the LCA supports and 
properly corresponds to the accompanying H-1B petition exceeds its 
authority. As explained in the NPRM, DHS already has the authority 
under INA sections 101(a)(15)(H)(i)(b), 103(a), and 214(a)(1) and 
(c)(1), 8 U.S.C. 1101(a)(15)(H)(i)(b), 1103(a), and 1184(a)(1) and 
(c)(1), to determine whether the LCA supports and properly corresponds 
with the H-1B petition. 88 FR 72870, 72902 (Oct. 23, 2023). As further 
stated in the NPRM, these changes do not supplant DOL's responsibility 
with respect to wage determinations. 88 FR 72870, 72903 (Oct. 23, 
2023). The authority provided to DOL under INA section 212(n), 8 U.S.C. 
1182(n), does not deprive DHS of authority to administer and enforce 
the H-1B nonimmigrant classification. Congress provided DHS with broad 
authority to administer and enforce the H-1B nonimmigrant 
classification, in addition to the authority provided to DOL to 
administer and enforce requirements pertaining to LCAs. See ITServe 
Alliance, Inc. v. U.S. Dep't of Homeland Sec., 71 F.4th 1028, 1037 
(D.C. Cir. 2023) (the authorities provided to DOL under 8 U.S.C. 
1182(n) ``are not by their terms exclusive, so as to oust USCIS from 
its own authority over the H-1B petition process. And the INA strongly 
suggests that the agencies' respective authorities are complementary 
rather than exclusive. . . .''). As the D.C. Circuit Court of Appeals 
explained, INA section 103(a)(1), 8 U.S.C. 1103(a)(1), independently 
provides DHS with authority to administer and enforce the INA, 
including a petitioning employer's compliance with the terms of an LCA. 
Id.
    USCIS' review pertains to evaluating whether the information on the 
LCA, including, but not limited to, the standard occupational 
classification (SOC) code, wage level (or an independent authoritative 
source equivalent), and location(s) of employment, sufficiently align 
with the information about the offered position as described in the 
petition. When conducting this review, USCIS officers consult DOL's 
published guidance and other publicly available sources referenced in 
DOL's prevailing wage determination policy guidance \132\ to determine 
what occupation and corresponding prevailing wage DOL certified so that 
USCIS can determine whether the information on the LCA is consistent 
with the information in the petition; however, USCIS officers would not 
question whether DOL properly certified the LCA.
---------------------------------------------------------------------------

    \132\ See ``Prevailing Wage Determination Policy Guidance,'' 
Employment and Training Administration, Dept. of Labor (Nov. 2009), 
https://www.dol.gov/sites/dolgov/files/ETA/oflc/pdfs/NPWHC_Guidance_Revised_11_2009.pdf.
---------------------------------------------------------------------------

    DHS disagrees with the assertion that the rule encourages USCIS 
adjudicators to perform a detailed analysis of each element of an LCA 
or investigate an employer's LCA practices. USCIS does not view the LCA 
or wage level as determinative of whether the position is a specialty 
occupation. Further, ensuring the LCA corresponds to the petition by 
comparing the information contained in the LCA against the information 
contained in the petition and supporting evidence is consistent with 
current practice. DHS also disagrees with the assertion that it is 
trying to impose additional requirements from the 2018 Contracts and 
Itineraries Memo, which was rescinded in 2020. As explained in USCIS' 
June 2020 policy memorandum ``Rescission of Policy Memoranda,'' the 
petitioner has the burden of proof to establish that employment exists 
at the time of filing and it will employ the beneficiary in the 
specialty occupation.\133\ If the petitioner's attestations and 
supporting documentation meet this standard, then the officer will not 
request additional evidence, provided all other eligibility 
requirements are met by a preponderance of the evidence. If the officer 
finds that a petitioner has not established, by a preponderance of the 
evidence, statutory or regulatory eligibility for the classification as 
of the time of filing, the officer will articulate that basis in 
denying the H-1B petition.
---------------------------------------------------------------------------

    \133\ See USCIS, ``Rescission of Policy Memoranda,'' PM-602-0114 
(June 17, 2020), https://www.uscis.gov/sites/default/files/document/memos/PM-602-0114_ITServeMemo.pdf.
---------------------------------------------------------------------------

    Comment: A professional association stated that USCIS' objective 
with the proposed amendment to the regulation regarding LCAs is 
unclear, given that it ``restates DOL regulations and DOL 
jurisdictional considerations.'' A healthcare provider requested that 
DHS provide additional clarity around the term ``properly support'' in 
the LCA provision, so that organizations can provide documentation that 
would be deemed acceptable. A joint submission said that the final rule 
should mirror existing DOL regulations in stating that USCIS would 
determine ``whether the petition is supported by an LCA which 
corresponds with the petition, [and] whether the occupation named in 
the [LCA] is a specialty occupation'' and remove ambiguous and 
potentially expansive language like ``properly corresponds'' that 
appear to broaden USCIS' scope of inquiry regarding LCAs. They further 
stated that the proposed rule contains no instructions for how an 
adjudicator should determine whether an LCA ``properly corresponds'' 
with the petition. An attorney writing as part of a form letter 
campaign said that it is not clear what USCIS means in its statement 
that it would not supplant DOL's responsibility with respect to wage 
determinations, inquiring if USCIS would now assert that a position 
should be wage level 2 or wage level 3 when the petitioner has followed 
DOL guidance in determining a wage level 1 position, or if USCIS would 
now assert the SOC code is not correct on the LCA after the petitioner 
has reviewed the SOC codes and selected the one which they feel is best 
aligned with the position.
    Response: As explained in the NPRM, when determining whether the 
submitted certified LCA properly corresponds with the petition, USCIS 
will consider all information on the LCA, including, but not limited 
to, the SOC code, wage level (or an independent authoritative source 
equivalent), and location(s) of employment. 88 FR 72870, 72903 (Oct. 
23, 2023). USCIS will evaluate whether that information sufficiently 
aligns with the offered position, as described in the rest of the 
petition and supporting

[[Page 103132]]

documentation. This is consistent with current practice and not 
intended to replace DOL's role or responsibility with respect to wage 
determinations. As explained in the previous response and in USCIS' 
June 2020 policy memorandum ``Rescission of Policy Memoranda,'' the 
petitioner has the burden of proof to establish that employment exists 
at the time of filing and it will employ the beneficiary in the 
specialty occupation.\134\ If the petitioner's attestations and 
supporting documentation meet this standard, then the officer will not 
request additional evidence, provided all other eligibility 
requirements are met by a preponderance of the evidence.
---------------------------------------------------------------------------

    \134\ See USCIS, ``Rescission of Policy Memoranda,'' PM-602-0114 
(June 17, 2020), https://www.uscis.gov/sites/default/files/document/memos/PM-602-0114_ITServeMemo.pdf.
---------------------------------------------------------------------------

    Material inconsistencies between the information certified on the 
LCA and contained in the petition and/or other supporting documentation 
may raise questions as to whether the petitioner has submitted all 
required evidence under the regulations or established eligibility by a 
preponderance of the evidence. For example, if the petition and other 
supporting documentation indicates that the beneficiary's position and 
associated job duties requires a wage level 2 or wage level 3 per DOL 
guidance, but the LCA is certified for a wage level 1 position, that 
may call into question whether the petition is supported by an LCA that 
properly corresponds to the petition or whether the offered position 
was accurately described in the petition. Similarly, USCIS may find a 
material discrepancy in cases where the SOC code on the LCA is 
inconsistent with the job duties as described in the H-1B petition. 
However, this is not the same as supplanting DOL's responsibilities 
because DOL does not review the information contained in the H-1B 
petition and supporting documentation. USCIS' review is limited to 
whether the information on the LCA sufficiently aligns with the offered 
position as described in the H-1B petition and supporting evidence, and 
does not in any way determine whether DOL properly certified the 
LCA.\135\
---------------------------------------------------------------------------

    \135\ In reviewing the LCA, USCIS uses published DOL guidance 
and other publicly available sources referenced in DOL's prevailing 
wage determination policy guidance. See ``Prevailing Wage 
Determination Policy Guidance,'' Employment and Training 
Administration, Dept. of Labor (Nov. 2009), https://www.dol.gov/sites/dolgov/files/ETA/oflc/pdfs/NPWHC_Guidance_Revised_11_2009.pdf.
---------------------------------------------------------------------------

    Comment: A few commenters said the proposed rule indicates that DHS 
believes the LCA duplicates the preexisting itinerary requirement in 
its explanation of its decision to eliminate said requirement. They 
said that the proposed rule's listing of the LCA provision as one 
designed ``to ensure [a] bona fide job offer for a specialty 
occupation'' reinforces that, consistent with DHS's position in the 
2018 Policy Memo, the Department currently views the LCA as substantive 
proof of whether a petition identifies an H-1B qualifying position--
akin to the former itinerary requirement. The commenters added that, in 
context, the LCA-review provision is a ``backdoor'' for USCIS 
adjudicators to reimpose a functionally identical itinerary requirement 
that was declared unlawful in ITServe Alliance, Inc. The commenters 
further stated that the provision suggests or does not foreclose that 
adjudicators may treat LCA review just like the itinerary requirement 
the rule eliminates, which the commenter said would be arbitrary and 
capricious and contrary to the INA. The commenters requested clarity on 
the meaning of ``properly support'' stating that nothing in the rule 
precludes USCIS from finding that an LCA does not ``properly support'' 
a petition if it fails to identify every third-party client to whom an 
H-1B worker might provide services throughout their tenure, risking 
compounding the non-speculative employment provision's ``error.''
    Response: DHS does not agree that new 8 CFR 
214.2(h)(4)(i)(B)(1)(ii) ``duplicates'' the itinerary requirement that 
is being removed in this final rule, or that new 8 CFR 
214.2(h)(4)(i)(B)(1)(ii) is a ``backdoor'' to reimpose an itinerary 
requirement. As stated in the NPRM and above, new 8 CFR 
214.2(h)(4)(i)(B)(1)(ii) codifies DHS's existing authority to ensure 
that the LCA supports and properly corresponds with the accompanying H-
1B petition. 88 FR 72870, 72902 (Oct. 23, 2023). As further explained 
in the NPRM, in determining whether the submitted certified LCA 
properly corresponds with the petition, consistent with current 
practice, USCIS will consider all the information on the LCA, 
including, but not limited to, the standard occupational classification 
(SOC) code, wage level (or an independent authoritative source 
equivalent), and location(s) of employment. 88 FR 72870, 72903 (Oct. 
23, 2023). USCIS will evaluate whether that information sufficiently 
aligns with the offered position, as described in the entire record of 
proceeding.\136\ This is different from the itinerary requirement, 
which is being removed in this final rule, and which previously 
required ``an itinerary with the dates and locations of the services or 
training.'' New 8 CFR 214.2(h)(4)(i)(B)(1)(ii) imposes no such 
requirements. Rather, this provision codifies USCIS' authority to 
compare the information contained in the LCA against the information 
contained in the petition and supporting evidence, and to deny or 
revoke the petition if the LCA does not properly correspond to the 
petition.
---------------------------------------------------------------------------

    \136\ 88 FR 72870, 72902-72903 (Oct. 23, 2023).
---------------------------------------------------------------------------

    DHS also does not agree that this provision will require 
petitioners to identify every third-party client to whom a beneficiary 
might provide services throughout their ``tenure.'' As explained in the 
NPRM and throughout this final rule, petitioners will not be required 
to demonstrate non-speculative or specific daily work assignments 
through the duration of the requested validity period. See new 8 CFR 
214.2(h)(4)(iii)(F). 88 FR 72870, 72902 (Oct. 23, 2023). Similarly, 
petitioners will not be required to identify every third-party client 
to whom a beneficiary might provide services throughout the requested 
validity period. DOL regulations require employers to list all intended 
places of employment on the LCA, 20 CFR 655.730(c)(5); and DOL has 
further specified that a worksite should be listed as an intended place 
of employment ``if the employer knows at the time of filing the LCA 
that it will place workers at the worksite, or should reasonably expect 
that it will place workers at the worksite based on: (1) an existing 
contract with a secondary employer or client, (2) past business 
experience, or (3) future business plans.'' \137\ Thus, neither DOL nor 
DHS regulations require a petitioner to list every third-party client 
to whom a beneficiary might provide services throughout the requested 
H-1B validity period. However, there may be instances where the places 
of employment listed on the LCA may be relevant to determining whether 
the LCA properly corresponds with the petition. For example, if the 
petition indicates that the beneficiary will be placed at a third-party 
worksite in Chicago, IL, but the LCA only contains work locations in 
Los Angeles, CA, USCIS may issue an RFE to provide the petitioner an 
opportunity to explain the discrepancy and to ensure that the LCA 
properly corresponds to the petition and covers all work locations for 
the beneficiary. Further, DHS notes that a petitioner can make changes 
to the beneficiary's place of employment or place the beneficiary

[[Page 103133]]

at new third-party site during the approval period, as long as the 
petitioner complies with DOL and DHS requirements, which may include 
filing new or amended LCAs and petitions as applicable.
---------------------------------------------------------------------------

    \137\ Labor Condition Application for H-1B, H-1B1 and E-3 
Nonimmigrant Workers Form ETA-9035CP--General Instructions for the 
9035 and 9035E, https://flag.dol.gov/sites/default/files/2019-09/ETA_Form_9035CP.pdf.
---------------------------------------------------------------------------

    Comment: A couple of trade associations stated that the provision 
to codify USCIS' ability to examine LCAs as evidence of a bona fide job 
offer would undermine USCIS' goal of reducing backlogs and improving 
efficiencies by requiring adjudicators to consider a new standard that 
is outside their expertise and legal purview, slowing down 
adjudications and resulting in more RFEs. Another trade association 
recommended that due to the ``unnecessary'' additional burden of 
paperwork, cost, and time on both the petitioner and USCIS, ``with 
little to no benefit for the additional requirement as the agency looks 
to streamline and not further complicate the H-1B program,'' DHS should 
eliminate the proposal for USCIS to review LCAs as proof of a bona fide 
job offer.
    Response: As discussed in the NPRM, this provision codifies DHS's 
existing authority to ensure that the LCA supports and properly 
corresponds with the accompanying H-1B petition. 88 FR 72870, 72902 
(Oct. 23, 2023). This is consistent with current practice and not 
expected to create additional burdens on petitioners or USCIS 
adjudicators.
    Comment: A professional association stated that given the 
complexity of the H-1B petition, the LCA provision should specify that 
denial or revocation of a petition due to USCIS' inability to verify 
facts would be limited to its inability to verify material facts rather 
than simply relevant facts. The commenter added that such a standard 
would provide necessary limits to the scope of USCIS authority and 
would be a wiser use of resources. An attorney stated that in the event 
that USCIS gives itself regulatory authority to review LCAs, USCIS 
should include in the final rule a requirement that USCIS, in any RFE 
or NOID, provide the LCA code and/or alternate wage that it believes 
applies to the position, and give the petitioner the opportunity to 
rebut the designation(s). An attorney writing as part of a form letter 
campaign stated that the technical changes such as replacing ``shall'' 
with ``must,'' ``application'' with ``certified labor condition 
application,'' and ``the Service'' with ``USCIS,'' for additional 
clarity should not be made because the petitioner already takes the 
time to review DOL SOC codes and wage levels.
    Response: DHS declines to make any additional changes to the LCA 
provision to limit USCIS' authority. As explained in the NPRM, while 
the LCA, H-1B petition, and supporting documentation must be for the 
same position, the same position does not necessarily mean that all 
information describing the position must be identical. 88 FR 72870, 
72903 (Oct. 23, 2023). A petitioner may supplement or clarify the 
record with additional information about the offered position in 
response to an RFE, on motion, or on appeal, and so long as the 
supplemental information does not materially change the position 
described in the H-1B petition, DHS would consider the position to be 
the same. Further, the technical changes are being made to add clarity 
to these provisions, not impose a new requirement on petitioners.
iv. Revising the Definition of U.S. Employer
    Comment: A company voiced support for DHS's proposal to amend its 
definition of U.S. employer to align with current adjudicatory 
practices and court rulings. A professional association voiced 
appreciation for synchronizing and modernizing the definition of 
``employer'' between USCIS and DOL for clarity, consistency, and 
entrepreneurship. The commenter stated that the current definition of 
``employer'' as well as the requirement to perform only specialty 
occupation work, created significant hurdles for physicians who wished 
to start a medical practice or incorporate as a solo practitioner for 
locum tenens work, such as filling critical shortages or vacancies to 
ensure uninterrupted care to patients throughout the country. The 
commenter added that the changes would directly support the ability of 
foreign physicians to become entrepreneurs, particularly those who 
desire to supplement the locum tenens workforce. A legal services 
provider added that on top of safeguarding integrity and compliance 
with the H-1B program, the changes to the definition would encourage 
entrepreneurship and not stifle business or personal growth, and would 
allow beneficiary-owners to take on further duties apart from the core 
specialty occupation requirement that relate to owning a business.
    Response: DHS agrees that the revised definition of U.S. employer 
better aligns the definition with current practice. As explained in the 
NPRM, this proposed change, which is being finalized as proposed, 
largely reflects USCIS' current practices since June 2020, following a 
court order and settlement agreement.\138\ 88 FR 72870, 72903 (Oct. 23, 
2023).
---------------------------------------------------------------------------

    \138\ See ITServe Alliance, Inc. v. Cissna, 443 F. Supp. 3d 14, 
19 (D.D.C. 2020) (finding that the USCIS policy interpreting the 
existing regulation to require a common-law employer-employee 
relationship violated the Administrative Procedure Act as applied 
and that the itinerary requirement at 8 CFR 214.2(h)(2)(i)(B) is 
ultra vires as it pertains to H-1B petitions).
---------------------------------------------------------------------------

v. Employer-Employee Relationship
    Comment: Several commenters supported DHS's proposal to remove the 
reference to ``an employer-employee relationship'' from the definition 
of U.S. employer, which had previously been a reason for petition 
denial. A law firm said that harmonization of DOL's and USCIS' 
definition of the ``employer-employee relationship'' is welcome. A 
joint submission agreed with USCIS that past policies regarding the 
establishment of employer-employee relationships have led to 
significant administrative barriers and limited access to key H-1B 
talent.
    Response: DHS appreciates the feedback. As explained in the NPRM, 
removing the employer-employee relationship language from the 
regulations promotes clarity and transparency in the regulations and 
supports DHS's overall commitment to reducing administrative barriers. 
88 FR 72870, 72903 (Oct. 23, 2023).
    Comment: An individual commenter said that the elimination of the 
employer-employee relationship would make the program ripe for abuse as 
anyone could declare themselves an employer and obtain an H-1B visa. A 
joint submission noted that DHS confirms that ``[i]t is in DHS's 
interests to promote, to the extent possible, a more consistent 
framework among DHS and DOL regulations for H-1B, E-3, and H-1B1 
petitions and to increase clarity for stakeholders,'' and acknowledges 
that USCIS past policy was inconsistent with DOL's regulatory 
definition of an employer, which resulted in USCIS deciding a 
petitioner was not an H-1B employer when DOL determined the petitioner 
was an employer and certified the LCA, which the commenters said 
increased the potential for confusion among H-1B stakeholders. The 
commenters said that the NPRM purports to significantly redefine DHS's 
definition of ``employer'' to exceed and conflict with DOL's regulatory 
definition, which would increase confusion and lead to contradictory 
results. The commenters stated that ``by focusing on contracts with 
third parties to determine whether a role is or is not a specialty 
occupation, USCIS is inherently shifting the focus of the

[[Page 103134]]

employer-employee relationship to the contractual relationship that 
exists between a company and its customers.'' The commenters 
recommended that DHS ``remove the emphasis on contractual relationships 
as a general matter and, in particular, any reference that relates to 
the definition of an employer-employee relationship.''
    Response: DHS disagrees that removing the reference to an employer-
employee relationship from the H-1B regulations will make the program 
ripe for abuse. As explained in the NPRM, this change is largely 
consistent with current USCIS policy guidance that the petitioner needs 
only to establish that it meets at least one of the ``hire, pay, fire, 
supervise, or otherwise control the work of'' factors with respect to 
the beneficiary to meet the employer-employee relationship test. 88 FR 
72870, 72904 (Oct. 23, 2023). However, since H-1B petitioners will 
continue to be required to submit an LCA attesting that they will pay 
the beneficiary, and a copy of any written contract (or summary of 
terms of the oral agreement) between the petitioner and the 
beneficiary, which typically affirms that they will hire and pay the 
beneficiary, the current employer-employee relationship test is usually 
met as a matter of complying with the other H-1B eligibility 
requirements. As an additional integrity measure, DHS is codifying 
within the definition of ``United States employer'' the existing 
requirement that the petitioner have a bona fide job offer for the 
beneficiary to work within the United States as well as a new 
requirement to have a legal presence in the United States and be 
amenable to service of process in the United States.
    Further, DHS disagrees that removing the employer-employee 
relationship requirement from the definition of ``United States 
employer'' exceeds and conflicts with DOL's regulatory definition of 
``employer'' at 20 CFR 655.715 \139\ and will increase confusion. 
Rather, the revised definition creates a more consistent framework 
among DHS and DOL regulations for H-1B, E-3, and H-1B1 petitions and 
increases clarity for stakeholders. As explained in the NPRM, USCIS' 
previous 2010 policy guidance sometimes caused USCIS to conclude that a 
petitioner was not an employer for purposes of the H-1B petition even 
though DOL deemed that same petitioner to be an employer for purposes 
of the LCA. 88 FR 72870, 72904 (Oct. 23, 2023). DHS also notes that it 
is not shifting the focus from the employer-employee relationship to 
the contractual relationship that exists between a company and its 
customers. As explained above, codifying DHS's authority to request 
contracts between the petitioner and a third party is a different 
provision and not intended to replace the employer-employee 
relationship requirement. Specifically, contracts and other similar 
evidence may be requested to show the non-speculative nature of the 
beneficiary's position and the minimum educational requirements to 
perform the duties, which go to the issue of whether the offered 
position qualifies as a specialty occupation and whether the job offer 
is bona fide, not whether the petitioner otherwise qualifies as a 
United States employer under the previous employer-employee 
relationship regulatory text.\140\
---------------------------------------------------------------------------

    \139\ Although the commenter referenced 20 CFR 755.715, DHS 
assumes the intended citation is to 20 CFR 655.715 which defines 
``employer'' as ``a person, firm, corporation, contractor, or other 
association or organization in the United States that has an 
employment relationship with H-1B, H-1B1, or E-3 nonimmigrants and/
or U.S. worker(s). In the case of an H-1B nonimmigrant (not 
including E-3 and H-1B1 nonimmigrants), the person, firm, 
contractor, or other association or organization in the United 
States that files a petition with the United States Citizenship and 
Immigration Services (USCIS) of the Department of Homeland Security 
(DHS) on behalf of the nonimmigrant is deemed to be the employer of 
that nonimmigrant.''
    \140\ This provision does not preclude USCIS from requesting 
contracts for other reasons, such as to establish eligibility of 
agents as petitioners, and maintenance of status. See 8 CFR 
214.2(h)(2)(i)(F) (``An agent performing the function of an employer 
must guarantee the wages and other terms and conditions of 
employment by contractual agreement with the beneficiary or 
beneficiaries of the petition.''); new 8 CFR 214.1(c)(6) (``Evidence 
of such maintenance of status may include, but is not limited to: 
copies of paystubs, W-2 forms, quarterly wage reports, tax returns, 
contracts, and work orders.'').
---------------------------------------------------------------------------

vi. Bona Fide Job Offer
    Comment: An attorney writing as part of a form letter campaign 
voiced support for DHS's codification in the definition of a U.S. 
employer of the existing requirement that the petitioner has a bona 
fide job offer for the beneficiary to work within the United States. 
Several commenters voiced support for the clarification that a bona 
fide U.S. job offer includes ``telework, remote work, or other off-site 
work within the United States'' which would bring DHS's definition of 
bona fide job offer in line with current U.S. employment practices. The 
university stated that it is important to note that many employees who 
work remotely may also have more flexible work schedules, such that 
their working hours deviate from common business hours.
    Response: DHS agrees with commenters that it is important to note 
that a bona fide U.S. job offer includes ``telework, remote work, or 
other off-site work within the United States,'' which may include more 
flexible work schedules.
    Comment: An advocacy group stated that while it supports the 
recognition of the flexible nature of work via the proposed rule's 
support for telework and remote work, DHS should ensure that the 
regulation does not eliminate the need for H-1B beneficiaries to 
complete some portion of their work in person within the United States. 
The commenter added that DOL's labor certification process already 
establishes criteria for third-party or offsite H-1B work locations, so 
the proposed language could be rewritten to state that an eligible U.S. 
employer must have ``a bona fide job offer for the beneficiary to work 
within the United States. The job offer may include, but should not be 
limited to, telework or remote work within the United States during the 
requested petition validity period.'' A law firm stated that a 
definition of what constitutes ``bona fide'' is required. A university 
stated that while employees may have different types of work 
arrangements, the NPRM does not sufficiently address some of the 
complexities and challenges that may result from those arrangements. A 
trade association said that a bona fide job offer is a concept that is 
``completely absent'' from DHS's current regulation or statutorily 
delegated powers, which the commenter said raises the question of how 
this ``existing requirement'' sprang to life and became in the DHS's 
view a binding and enforceable standard.
    Response: DHS agrees with the commenters that the bona fide job 
offer must be in the United States. The regulatory text at 8 CFR 
214.2(h)(4)(ii) clearly states that the U.S. employer in the United 
States has a bona fide job offer for the beneficiary to work ``within 
the United States,'' which may include telework, remote work, or other 
off-site work ``within the United States.'' By repeating ``within the 
United States'' several times throughout the provision, DHS believes it 
is sufficiently clear that the job opportunity must be in the United 
States and the work must be performed in the United States. DHS also 
declines to further define the term ``bona fide'' in the regulatory 
text, which is used throughout numerous immigration provisions and 
follows the standard definition and Latin translation of ``in good 
faith.'' \141\ Additionally, DHS does not think it is

[[Page 103135]]

necessary to address various complexities and challenges that may 
result from different types of work arrangements. Each case will be 
adjudicated on its merits, and it is not possible to cover all possible 
types of work arrangements in this rulemaking. Regarding the assertion 
that a bona fide job offer is absent from DHS's regulations or 
statutorily delegated powers, this basic requirement derives from the 
statutory and regulatory requirements that the petitioner be an 
``importing employer'' and a ``United States employer'' that will 
employ the beneficiary in a ``specialty occupation.'' See INA sec. 
214(c)(1), (i)(1); 8 CFR 214.2(h)(4)(i)(A)(1); 8 CFR 214.2(h)(4)(ii). 
It is also reflected in current USCIS policy guidance, which states 
that the petitioner must establish that ``[a] bona fide job offer . . . 
exist[s] at the time of filing,'' \142\ as explained in the NPRM. 88 FR 
72870, 72904 (Oct. 23, 2023). This requirement, which is being codified 
in DHS regulations in this final rule, is also consistent with DHS's 
general authority under 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 and establish such regulations as the 
Secretary deems necessary for carrying out such authority. It is also 
consistent with section 214(a)(1) of the INA, 8 U.S.C. 1184(a)(1), 
which authorizes the Secretary to prescribe by regulation the time and 
conditions of nonimmigrant admission and 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 nonimmigrant 
workers, including H-1B nonimmigrants, and the information that an 
importing employer must provide in the petition.
---------------------------------------------------------------------------

    \141\ Miriam-Webster Dictionary, ``Bona fide,'' https://www.merriam-webster.com/dictionary/bona%20fide.
    \142\ See USCIS, ``Rescission of Policy Memoranda,'' PM-602-0114 
(June 17, 2020); see also USCIS, Adjudicator's Field Manual (AFM) 
Chapter 31.3(g)(4) at 24, ``H1-B Classification and Documentary 
Requirements has been partially superseded as of June 17, 2020,'' 
available at https://www.uscis.gov/sites/default/files/document/policy-manual-afm/afm31-external.pdf (``The burden of proof falls on 
the petitioner to demonstrate the need for such an employee. Unless 
you are satisfied that a legitimate need exists, such a petition may 
be denied because the petitioner has failed to demonstrate that the 
beneficiary will be employed in a qualifying specialty 
occupation.''). While USCIS retired the AFM in May 2020, this 
example nevertheless illustrates the agency's historical 
interpretation.
---------------------------------------------------------------------------

vii. Legal Presence and Amenable to Service of Process
    Comment: A law firm said that the legal presence and amenable to 
service of process provision is ``not controversial.'' A joint 
submission also voiced support for the provision, adding that it would 
provide clear guidance to all employers, especially new and emerging 
companies, with respect to the minimum legal threshold for establishing 
their status as bona fide U.S. employers.
    An attorney writing as part of a form letter campaign said that 
DHS's proposal to replace the requirement that the petitioner 
``[e]ngages a person to work within the United States'' with the 
requirement that the petitioner have a legal presence and be amenable 
to service of process in the United States is unclear. The commenters 
said that while DHS is not proposing to change the requirement of an 
employment identification number (EIN), it is making the definition 
vague, voicing confusion about the term ``have a legal presence.'' The 
commenters inquired whether DHS intended to allow non-U.S. employers to 
petition if they have a P.O. box and an EIN, or whether DHS considered 
how DOL would interpret this legal presence regarding the use of a P.O. 
box when it comes to the labor certification process where there is a 
physical address requirement. The commenters stated that ``[i]t does 
not make sense to change from the current definition of `United States 
employer as a person, firm, corporation, contractor, or other 
association, or organization in the United States.' '' Additionally, an 
individual commenter requested that a U.S. employer should have an 
office and staff in the registered location, including if it is remote 
and hybrid within the United States and not elsewhere like offshore or 
outside of the United States. The commenter added that the U.S. 
employer should process all information in the United States and not 
through ``group companies like for [i]nsurance,'' while payroll 
processing and benefits could be done by a vendor or third party.
    Response: DHS agrees with the commenters who said that requiring 
the petitioner to have a legal presence in the United States and be 
amenable to service of process in the United States will provide clear 
guidance to employers with respect to the minimum legal threshold for 
establishing their status as eligible U.S. employers, and disagrees 
with the commenters who said this requirement is confusing. As 
explained in the NPRM, ``legal presence'' means that the petitioner is 
legally formed and authorized to conduct business in the United States, 
and ``amenable to service of process'' means that the petitioner may be 
sued in a court in the United States. 88 FR 72870, 72905 (Oct. 23, 
2023).
    To clarify, this is a new requirement at prong two of the 
definition of ``United States employer.'' Overall, DHS is removing the 
previous requirement that the petitioner ``[e]ngages a person to work 
within the United States'' and the employer-employee relationship 
requirement, and is adding the requirements that (1) the petitioner 
have a bona fide job offer for the beneficiary to work within the 
United States, and (2) the petitioner has a legal presence and is 
amenable to service of process in the United States. DHS is still 
maintaining the part of the definition that a United States employer 
means a person, firm, corporation, contractor, or other association, or 
organization in the United States.
    Regarding the questions of whether, under the legal presence 
requirement, DHS intends to allow non-U.S. employers to petition as a 
U.S. employer if they have a P.O. box and an EIN or whether such 
employers must have a physical address/office in the United States, DHS 
believes that this is generally covered by the new requirement that the 
petitioner have a legal presence in the United States as well as the 
LCA requirements.\143\ Ultimately, however, the answer may depend on 
the applicable state(s) laws where the petitioner is legally formed and 
authorized to conduct business in the United States. DHS declines to 
add additional regulatory requirements that were not proposed in the 
NPRM, such as requiring a physical office with staff or specifying 
where and by whom various business information must be processed.
---------------------------------------------------------------------------

    \143\ See ``Temporary Alien Workers Seeking Classification Under 
the Immigration and Nationality Act,'' 56 FR 61111, 61112 (Dec. 2, 
1991) (explaining that the requirement to post a notice of the 
filing of a labor condition application at the petitioner's place of 
employment ``obviously requires the petitioner to have a legal 
presence in the United States'').
---------------------------------------------------------------------------

12. Beneficiary-Owners
    Comment: A couple of commenters expressed general support for 
provisions impacting entrepreneurs, noting that the proposed 
regulations would encourage entrepreneurs to start their own businesses 
and not stifle business or personal growth. One commenter said that 
this would be highly beneficial to the visa holder, the startup 
environment, and the United States; and, another commenter said this 
would support the entrepreneurial spirit of the United States and would 
help improve the economy by enabling entrepreneurs to file as H-1B 
petitioners. A professional association wrote that improved H-1B 
policies could allow

[[Page 103136]]

postdoctoral researchers to remain in the United States and ``continue 
contributing to the U.S. innovation pipeline while cutting red tape.'' 
Other commenters said that by giving H-1B holders the chance to pursue 
entrepreneurship opportunities, the proposed rule would create 
employment opportunities for others in the United States, move the H-1B 
program in a positive direction, and prevent talented individuals from 
leaving the United States for Canada, Australia, and their home 
countries. A commenter wrote that they know of people who have 
travelled back to their home countries to start their entrepreneurial 
journey because of current restrictions in the United States and that 
by removing entrepreneurship restrictions for such individuals, the 
U.S. economy would benefit from new successful companies.
    An advocacy group expressed appreciation for USCIS' exploration of 
policies to improve H-1B pathways for startup talent. Another commenter 
emphasized the prevalence of immigrants in the startup ecosystem while 
expressing concerns about declining U.S. innovation as the United 
States becomes a less attractive destination for qualified 
entrepreneurs compared to places like the UK, the European Union, and 
Canada.
    An advocacy group wrote that the definition of an employer-employee 
relationship makes it difficult for entrepreneurs to qualify for H-1B 
status, which USCIS has recognized deters high-skilled foreign 
nationals from starting a company. While citing a report from the 
National Foundation for American Policy, the group emphasized that 
nearly two-thirds of U.S. billion-dollar companies were founded or co-
founded by immigrants or the children of immigrants, representing what 
the U.S. economy loses when restricting foreign-born entrepreneurship.
    Response: DHS appreciates the feedback from these commenters and 
acknowledges that there are limited pathways for entrepreneurs to come 
to the United States under existing regulations. The intent of the 
beneficiary-owner provisions is to promote access to the H-1B program 
for entrepreneurs, start-up entities, and other beneficiary-owned 
businesses while also setting reasonable conditions for when the 
beneficiary owns a controlling interest in the petitioning entity to 
better ensure program integrity.
    Comment: Numerous commenters offered remarks in support of the 
measures enabling beneficiary-owners to access and participate in the 
H-1B program. One commenter said that the proposed H-1B eligibility 
requirements ``hold promise'' for emerging entrepreneurs, while an 
advocacy group welcomed steps towards creating pathways for 
entrepreneurs to develop and grow businesses in the United States. An 
advocacy group supported the regulatory language acknowledging that 
beneficiary-owners are ``legitimate and valid participants in the H-1B 
program,'' and a research organization said the proposal is an 
improvement upon existing rules. A few commenters generally endorsed 
the relaxation of ``unreasonable and unnecessary requirements for 
founders, while other commenters stated the general need to allow H-1B 
holders to start a business.
    Numerous commenters endorsed the provision on the basis that 
promoting access to H-1B visas for entrepreneurs and start-up owners 
would foster innovation, job creation, and economic growth in the 
United States. A trade association supported additional pathways for 
entrepreneurs and founders, reasoning that their companies represent an 
essential part of the U.S. economy. Similarly, a joint submission 
described the role of beneficiary-owners in the start-up economy and 
ongoing barriers to innovators in the U.S. immigration system. The 
commenters supported the rule's provisions allowing founders to launch 
and grow companies and slow the drain of start-up talent to other 
countries. A form letter campaign wrote that, in addition to job 
creation and innovation, the proposed provisions facilitating H-1B 
access for start-up founders would drive industry diversity and global 
competitiveness. A law firm added that codifying a petitioner's ability 
to qualify as a U.S. employer, even when the beneficiary owns a 
controlling interest in the petitioner's business, would address 
historical barriers for beneficiary-owned businesses in the H-1B 
program. The commenter wrote that the changes would encourage more 
innovators to utilize the program, leading to increased innovation, job 
creation, and new opportunities. While citing a report from the New 
American Economy, an advocacy group wrote that immigrant 
entrepreneurship is a ``major economic and jobs multiplier'' that keeps 
talent in the United States while creating employment opportunities for 
U.S.-born workers. The group concurred with DHS's statement in the NPRM 
that if more entrepreneurs can obtain H-1B status, the United States 
would benefit from the creation of jobs, new industries, and 
opportunities. Another commenter added that entrepreneurs bring a 
wealth of knowledge that contributes to the growth of various sectors, 
including health, technology, and finance. The commenter said that 
attracting global talent would encourage the creation of cutting-edge 
solutions, products, and services to enhance U.S. competitiveness while 
aligning with the principles of a dynamic and inclusive economy.
    An advocacy group welcomed DHS's efforts to acknowledge the 
contributions of immigrant founders in the start-up and innovation 
ecosystem. The advocacy group said that easing barriers for founders to 
come to the United States is a ``net positive,'' as the majority of 
billion-dollar start-ups have at least one immigrant founder. These 
companies, the advocacy group said, create U.S.-based jobs while 
strengthening the economy and communities. Additionally, the group said 
that encouraging entrepreneurs' participation in the program would 
represent an important step in supporting more pathways for immigrant 
founders to come to the United States. A law firm remarked that 
``liberalizing'' opportunities for founders to obtain H-1B status would 
increase the number of companies established by graduates of U.S. 
universities. A university wrote that international students often to 
pursue entrepreneurial ventures outside of the United States and that 
this proposal would create an important opportunity for international 
researchers to become entrepreneurs in the United States.
    Commenters also supported the clarification around beneficiary-
owners on the basis that it would provide increased certainty to 
prospective beneficiaries and other stakeholders in the H-1B program. A 
business association thanked DHS for including explicit regulatory 
authorization for entrepreneurs to obtain H-1B visas, reasoning that 
this approach aligns with its previous recommendations to the agency 
and would provide greater certainty for start-up businesses across 
industries. A joint submission endorsed efforts to encourage 
beneficiary-owner participation in the H-1B program and concurred with 
the NPRM's description of problems and uncertainty affecting the 
entrepreneurial community. The commenters supported efforts to clarify 
longstanding policies and establish practices that facilitate the 
inclusion of entrepreneurs, founders, and beneficiary-owned petitioners 
in the H-1B visa program. Another joint submission and a form letter 
campaign also concurred that USCIS' common-law analysis of the 
employer-employee relationship has been an impediment to beneficiary-
owners as a result of the

[[Page 103137]]

legacy of the now-rescinded 2010 guidance and reasoned that the 
proposed change would provide much-needed clarity.
    Response: DHS agrees that clarifying how the regulations apply to 
entrepreneurs will provide greater certainty for entrepreneurs and 
start-up business owners. In clarifying this policy, DHS seeks to 
encourage more beneficiary-owned businesses to participate in the H-1B 
program. As explained in the NPRM, if more entrepreneurs are able to 
obtain H-1B status, the United States could benefit from the creation 
of jobs, new industries, and opportunities. 88 FR 72870, 72905 (Oct. 
23, 2023).
    Comment: While expressing support for the proposed measures to 
provide H-1B visas to beneficiary-owners, an advocacy group encouraged 
DHS to ease pathways--via H-1B and other programs--for start-up 
founders who do not have a controlling interest in their companies to 
remain in the United States and grow their companies. The group 
reasoned that facilitating pathways only for those with controlling 
ownership may force founders to decide between expansion, which comes 
with relinquishing majority ownership, or retaining equity for visa 
purposes, limiting companies' contributions to the U.S. economy.
    Response: There is nothing currently, or historically, in the 
regulations that prevents an owner with less than a controlling 
interest from qualifying for H-1B status. As explained in the NPRM, 
historically, USCIS' common law analysis of the employer-employee 
relationship has been an impediment for certain beneficiary-owned 
businesses (e.g., beneficiaries who are the sole operator, manager, and 
employee), to use the H-1B program. 88 FR 72870, 72905 (Oct. 23, 2023). 
Through the beneficiary-owner provision, DHS is clarifying its current 
policy and encouraging more beneficiary-owned businesses to participate 
in the H-1B program. By creating certain conditions--such as the 
majority of the time requirement and shortened validity periods--that 
would apply when a beneficiary owns a controlling interest in the 
petitioner, DHS intends to ensure that the beneficiary will be employed 
in a specialty occupation in a bona fide job opportunity. Limiting this 
framework to beneficiary-owners who have a controlling interest in 
their companies is meant to add integrity protections to the program 
and prevent these owners from abusing the H-1B program. This is not 
intended to hinder or impede entrepreneurs who do not have a 
controlling interest in their companies, to whom the additional 
conditions would not apply. DHS seeks to encourage more beneficiary-
owned businesses to participate in the H-1B program, regardless of 
whether they have a controlling interest in the petitioning business.
    Comment: A few commenters voiced concern about allowing petitioners 
to sponsor themselves for an H-1B visa, including a commenter who 
generally stated that H-1B visa holders should not be allowed to have 
their own businesses or start-ups. A different commenter wrote without 
reference to any statutory provisions, or analysis thereof that ``self-
sponsorship'' would be risky and breach H-1B law established by 
Congress, while another commenter expressed concerns with program 
exploitation associated with self-sponsored visa holders. A different 
commenter also expressed concern with abuse associated with the 
provisions allowing entrepreneurs to ``self-sponsor'' their H-1B visa. 
The commenter said that in the absence of ``proper gating criteria'' 
for beneficiary-owners, DHS would likely see an increase in ``self-
sponsor'' petitions.
    Response: DHS disagrees that the beneficiary-owner provision is 
ultra vires. There is nothing in the statute prohibiting a noncitizen 
with an ownership interest in a U.S. employer from being the 
beneficiary of an H-1B petition filed by that employer and the 
commenter did not identify any statutory provisions that preclude a 
beneficiary-owned business from qualifying as an employer for H-1B 
purposes.
    Through this provision DHS is clarifying its current policy, which 
has been in place since 2020 \144\ when DHS rescinded its 2010 policy 
memorandum \145\ explaining the common law analysis of the employer-
employee relationship. However, like some commenters, DHS is also 
concerned with the possibility of beneficiaries exploiting the H-1B 
program, which is why DHS is creating certain conditions that must be 
adhered to when a beneficiary owns a controlling interest in the 
petitioner. These conditions include the requirement that the 
beneficiary must perform specialty occupation duties a majority of the 
time and shortened validity periods for the initial petition and first 
extension of 18 months. These restrictions are meant to act as 
safeguards and to better ensure that the beneficiary will be employed 
in a specialty occupation in a bona fide job opportunity.
---------------------------------------------------------------------------

    \144\ See USCIS, ``Rescission of Policy Memoranda,'' PM-602-0114 
(Jun. 17, 2020).
    \145\ See USCIS, ``Determining Employer-Employee Relationship 
for Adjudication of H-1B Petitions, Including Third-Party Site 
Placements,'' HQ 70-6.2.8, AD 10-24 (Jan. 8, 2010) (rescinded).
---------------------------------------------------------------------------

    DHS disagrees with the claims that this provision amounts to 
``self-sponsorship'' and would be contrary to statute. There is a 
difference between allowing a beneficiary-owned business, versus an 
individual acting in their individual capacity, to file a petition as a 
``United States employer.'' As a general principle of law, a 
corporation is a separate and distinct legal entity from its owners or 
stockholders.\146\ Therefore, even if a beneficiary is a sole owner of 
a business, that business may still file an H-1B petition as a ``United 
States employer'' if the business meets all the definitional elements 
at new 8 CFR 214.2(h)(4)(ii), i.e., has a bona fide job offer of 
employment, has a legal presence in the United States and is amenable 
to service of process, has an IRS tax identification number, and, if 
the beneficiary has a controlling interest in the petitioner, the 
beneficiary will perform specialty occupation duties a majority of the 
time, consistent with the terms of the H-1B petition. DHS notes that 
the regulatory definition of ``United States employer'' at 8 CFR 
214.2(h)(4)(ii)--which has existed since 1991--includes ``a person.'' 
\147\
---------------------------------------------------------------------------

    \146\ See Matter of M, 8 I&N Dec. 24, 50 (BIA 1958, AG 1958); 
Matter of Aphrodite Investments Ltd., 17 I&N Dec. 530 (Comm'r 1980); 
Matter of Tessel, 17 I&N Dec. 631 (Acting Assoc. Comm'r 1980).
    \147\ See 56 FR 61112 (Dec. 2, 1991) (adding a definition of the 
term ``United States employer'' in the final rule to include ``a 
person''); see also 57 FR 12179 (Apr. 9, 1992) (interim rule) 
(maintaining ``a person'' (but eliminating ``which suffers or 
permits a person to work within the United States'') from the 
definition of ``United States employer'').
---------------------------------------------------------------------------

    Comment: Numerous commenters expressed support for the provision 
clarifying that the beneficiary may perform duties that are directly 
related to owning and directing the petitioner's business, as long as 
the beneficiary performs specialty occupation duties authorized under 
the petition for a majority of the time. Several commenters reasoned 
that the proposal would acknowledge the reality of beneficiary-owners' 
responsibilities outside of specialty occupation tasks and allow them 
to grow their businesses. For example, a law firm generally stated that 
the proposal reflects the duties of entrepreneurs in addition to their 
specialty occupation tasks, while an advocacy group said that allowing 
beneficiaries to perform duties outside of the scope of their specialty 
occupation would be critical for founders, enabling them to engage in 
other tasks inherent to building a startup, like seeking out investors. 
A

[[Page 103138]]

joint submission, expressing strong support for the NPRM's proposal and 
reasoning, similarly wrote that the flexibility would allow 
beneficiaries to drive business growth with confidence through 
responsibilities not reflected in their specialty occupation duties, 
such as by pitching to investors to raise funds and negotiating 
contracts. The joint commenters concluded that these business 
responsibilities are essential for maintaining the viability of 
companies. Likewise, another joint submission wrote that permitting 
beneficiaries to perform duties outside the scope of their specialty 
occupation would provide them with greater opportunities to grow and 
succeed. A professional association similarly supported agency efforts 
to clarify that beneficiary-owners may perform non-specialty-occupation 
work on a limited basis, reasoning that founders in the medical sector 
must perform other duties outside of direct patient care. The 
association said that the clarification around non-specialty-occupation 
work is a ``reasonable and helpful modification'' to ensure that 
physician-owners can carry out necessary administrative tasks for 
providing clinical care.
    A joint submission expressed support for the proposed changes 
establishing a ``majority of the time'' framework on the basis that it 
would give clarity to economically significant start-ups and 
entrepreneurs and provide a workable framework for beneficiary-owners 
to perform their duties in startup entities and as entrepreneurs. The 
commenters wrote that the changes could encourage the use of specialty 
occupation workers in critical industries and meet USCIS' policy goals 
of reducing barriers to entry for startups. The commenters agreed with 
DHS's ``commonsense explanations'' around the proposed provision and 
wrote that the proposed framework would allow beneficiary-owners to 
wear the various ``hats'' that they may undertake. The commenters 
commended DHS for moving towards a framework of increased flexibility, 
thereby allowing entrepreneurs to consider specialty occupation workers 
to develop their businesses while expanding and innovating the U.S. 
economy. Echoing the above remarks, another law firm reasoned that the 
proposed approach would offer flexibility for beneficiary-owners while 
maintaining program requirements, striking a balance between promoting 
entrepreneurship and preventing misuse of the H-1B program. Another 
commenter generally requested more relaxation on non-specialty 
occupation related duties for beneficiary-owners, reasoning that this 
would give more opportunities for job creation.
    Response: DHS agrees with commenters that it is important to 
clarify that the beneficiary may perform non-specialty occupation 
duties that are directly related to owning and directing the 
petitioner's business to allow beneficiaries to drive business growth 
with confidence through responsibilities not reflected in their 
specialty occupation duties. DHS acknowledges the reality of 
beneficiary-owners' responsibilities outside of specialty occupation 
tasks and clarifies that this is permitted as long as the beneficiary 
performs specialty occupation duties authorized under the petition 
during a majority of the time. As stated in the NPRM, the goal is to 
ensure that a beneficiary who is the majority or sole owner and 
employee of a company would not be disqualified by virtue of having to 
perform duties directly related to owning and directing their own 
company. 88 FR 72870, 72906 (Oct. 23, 2023). The ``majority of the 
time'' standard is also necessary to ensure that a beneficiary who is 
the majority or sole owner and employee of a company would still be 
``coming temporarily to the United States to perform services . . . in 
a specialty occupation'' as required by INA section 
101(a)(15)(H)(i)(b). Therefore, DHS declines to expand this flexibility 
any further.
    Comment: A joint submission requested clarification on non-
specialty occupation job duties for beneficiary-owners that ``must be 
directly related to owning and directing the business'' and expressed 
concern over potential disagreement over what are considered to be 
directly related to owning and directing a business. The commenters 
requested additional guidance as to what duties are considered to be 
directly related to owning and directing a business to facilitate 
consistent decision making.
    Response: As discussed in the NPRM, DHS recognizes that, similar to 
other H-1B petitions, a beneficiary-owner may perform some incidental 
duties, such as making copies or answering the telephone. 88 FR 72870, 
72905 (Oct. 23, 2023). In addition, DHS expects a beneficiary-owner 
would need to perform some non-specialty occupation duties when growing 
a new business or managing the business. Notwithstanding incidental 
duties, non-specialty occupation duties must be directly related to 
owning and directing the business. These duties may include, but are 
not limited to: signing leases, finding investors, and negotiating 
contracts. Other examples might include developing a business plan, 
engaging with potential suppliers and other stakeholders, or talent 
acquisition. These examples are non-exhaustive and may not apply in 
every case. DHS does not believe that additional guidance or 
explanation of which duties are ``directly related to owning and 
directing the business'' is necessary because it is a fact-specific 
determination that will require a case-by-case determination. As stated 
in the NPRM, the goal is to ensure that a beneficiary who is the 
majority or sole owner and employee of a company would not be 
disqualified by virtue of having to perform duties directly related to 
owning and directing their own company, while also ensuring that the 
beneficiary would still be ``coming temporarily to the United States to 
perform services . . . in a specialty occupation'' as required by INA 
section 101(a)(15)(H)(i)(b). 88 FR 72870, 72906 (Oct. 23, 2023). Thus, 
in each case, USCIS will analyze all of the job duties--specialty 
occupation duties and non-specialty occupation duties--which the 
petitioner must accurately describe in the petition along with the 
expected percentage of time to be spent performing each job duty, and, 
for extensions, the time spent performing these duties in the preceding 
petition's validity period, to determine whether the job would be in a 
specialty occupation and to determine whether the non-specialty 
occupation duties are directly related to owning and directing the 
business. If the beneficiary would spend a majority of their time 
performing specialty occupation duties, and if the non-specialty 
occupation duties are directly related to owning and directing the 
business, then the position may qualify as a specialty occupation.
    DHS emphasizes that nothing in this final rule would change DOL's 
administration and enforcement of statutory and regulatory requirements 
related to LCAs, including requirements concerning the appropriate 
prevailing wage and wage level when the proffered position involves a 
combination of occupations. See 8 U.S.C. 1182(n); 20 CFR part 655, 
subparts H and I.

[[Page 103139]]

For example, in some cases the petition might involve a combination of 
occupations that can affect the petitioner's wage obligation, as 
detailed in DOL's wage guidance.\148\ Generally, when an H-1B employer 
requests an optional prevailing wage determination from DOL, the 
National Prevailing Wage Center will assign to the position the 
occupational code that has the higher of the prevailing wages amongst 
the combination of occupations. Under this final rule, a petitioner may 
be authorized to employ a beneficiary-owner in a combination of 
occupations, provided that the petitioner pays the required wage, 
consistent with existing DOL wage guidance, even when the beneficiary-
owner is performing non-specialty occupation duties as authorized by 
USCIS in accordance with this final rule.
---------------------------------------------------------------------------

    \148\ DOL, ``Round 3: Implementation of the Revised Form ETA-
9141 FAQs'' at 1 (July 16, 2021) (When there is a combination of 
occupations, the SOC code with the highest wage is assigned.), 
https://www.dol.gov/sites/dolgov/files/ETA/oflc/pdfs/NPWC%20Round%203%20Frequently%20Asked%20Questions%20-%20Implementation%20of%20Revised%20Form%20ETA-9141.pdf; DOL, 
``Prevailing Wage Determination Policy Guidance Nonagricultural 
Immigration Programs Revised November 2009'' at 4 (If the employer's 
job opportunity involves a combination of occupations, the National 
Prevailing Wage Center should list the relevant occupational code 
for the highest paying occupation.), https://www.flcdatacenter.com/download/npwhc_guidance_revised_11_2009.pdf (last visited Oct. 3, 
2023).
---------------------------------------------------------------------------

    Comment: A joint submission expressed appreciation for the 
clarification that beneficiary-owners may seek concurrent H-1B 
employment with multiple qualifying specialty occupation roles as long 
as the ``majority of the time'' framework applies to those situations. 
An advocacy group similarly supported DHS's clarification that 
beneficiary-owners are not prohibited from engaging in concurrent 
employment. A commenter expressed that H-1B beneficiary owners should 
be able to form a C corporation while working with their current 
employer. A different commenter suggested an H-1B beneficiary could be 
employed by a Fortune 500 company and own a firm, enabling H-1B visa 
holders to have a regular job while having the opportunity to engage in 
entrepreneurial activities. The commenter also suggested an initial 
``filter'' to allow concurrent employment only for limited companies, 
such as Fortune 500 companies and those that work with the Federal 
Government.
    Response: DHS agrees with the commenters that it is helpful to 
petitioners to clarify that beneficiary-owners may seek concurrent H-1B 
employment with multiple qualifying specialty occupation roles as long 
as the ``majority of the time'' framework applies to those situations 
where the beneficiary spends time working in the beneficiary-owner 
position. While a beneficiary may be able to form and hold a 
controlling interest in a business, whether organized as a C 
corporation or another type of legal entity, the beneficiary would 
generally not be authorized to work for that business until authorized 
to do so (e.g., upon approval of a petition filed by that business or, 
if eligible for H-1B portability, upon the filing of an H-1B petition 
by that business). As explained in the NPRM, the beneficiary-owner 
provision does not preclude the beneficiary from being authorized for 
concurrent employment with two or more entities (including another 
entity where the beneficiary is also an owner with a controlling 
interest) so long as each entity has been approved to employ the 
beneficiary in a specialty occupation and the individual otherwise 
satisfies all eligibility requirements. 88 FR 72870, 72905 (Oct. 23, 
2023). Therefore, under these circumstances, an H-1B beneficiary could 
seek authorization to work for a business in which they have a 
controlling interest while concurrently working for another employer 
authorized to employ the beneficiary as an H-1B nonimmigrant. However, 
DHS disagrees that initial ``filters'' or limitations are necessary, 
such as limiting concurrent employment to working for Fortune 500 
companies or companies that work with the Federal Government. The 
commenter did not explain the purpose such restrictions would serve and 
there is nothing to suggest that restricting the eligibility of 
beneficiary-owners in this way would enhance program integrity or 
otherwise be beneficial to the H-1B program.
    Comment: Several commenters expressed support for limiting the 
validity period for initial petitions and extensions to 18 months. For 
example, a commenter acknowledged the practicality of the cautionary 
rules for a shorter visa extension.
    Response: DHS agrees that it is important to add certain safeguards 
to prevent program abuse and is limiting the first two validity periods 
to 18 months each as a safeguard against possible abuse or fraud.
    Comment: Numerous commenters expressed opposition to the proposed 
18-month validity period for initial petitions and extensions. A 
commenter stated that this provision will enhance exploitation and 
outsourcing and that having ``no string attached'' before an 18-month 
visa is granted is a long time to inflict substantial damage, while 
another commenter suggested that the 18-months validity period is too 
short for new start-ups and businesses to become profitable and 
generate employment for U.S. citizens. Another commenter said that 
there should be no minimum investment since there are other programs 
available (like EB-5) to those start-ups, and it would discourage other 
individuals from contributing to the U.S. economy. An advocacy group 
requested further clarification as to how individuals would continue to 
invest in the economy when their initial stay is limited to 18 months 
and how entrepreneurs may obtain permanent residency in the United 
States through the H-1B program.
    A commenter said that the 18-month validity period would not reduce 
fraud but would discourage other potential entrepreneurs since they 
would have little negotiation power when seeking venture capital. An 
advocacy group wrote that the 18-month validity period is unnecessary 
and said that start-ups often take long periods of time to become 
profitable; requiring founders to renew their visas frequently would 
impair them when securing investors. An advocacy group said it would be 
detrimental to an H-1B visa holder if they had to leave the United 
States to renew their visa, and even more detrimental if they were 
simultaneously filling a specialty role at their companies, making it 
impossible to secure funding for their start-up. An attorney reasoned 
that if all other H-1B requirements remain the same for beneficiary-
owners, the limiting measure is unnecessary and would create an 
administrative burden on the agency by requiring more frequent 
adjudications and increasing processing times. The attorney also stated 
that the areas of potential fraud that the 18-month limit would protect 
against are not identified. Another joint submission stated that the 
18-month validity period places an undue burden of unnecessary 
oversight on beneficiary-owned entities which detrimentally impacts 
their operations, and that the validity period does not prevent 
fraudulent H-1B petitions. The commenters in the submissions reasoned 
that the 18-month limit would be expensive, since an initial petition 
can cost up to $4,960. One of the joint submissions additionally noted 
that there are other visa categories available to entrepreneurs and the 
18-month limit would cause the H-1B visa to be less attractive and 
could cause unneeded stress to founders, entrepreneurs, and 
petitioners. A research organization

[[Page 103140]]

stated that limiting the first two validity periods to 18 months as a 
safeguard against possible fraudulent petitions is not feasible for a 
nonprofit entity or a nonprofit research organization that must obtain 
approval by the IRS.
    A business association wrote that the 18-month validity period 
would adversely affect small businesses that have less resources to 
comply with the H-1B program's requirements and that there are already 
sufficient tools and guardrails in place to combat fraud. The 
association also stated that competing firms that have no beneficiary 
ownership would only need to apply for an H-1B worker once, while the 
beneficiary owned firm would have to petition twice as many times 
during the same period. A different commenter stated that limited 
validity period would actually discourage founders from focusing on 
innovating and founding companies since the H-1B renewal process is 
time-consuming, expensive, and adds instability for founders. A couple 
of commenters reasoned that the 18-month validity period would be 
burdensome, have unnecessary costs, and would generate more petitions 
for the agency to adjudicate. A professional association recommended 
that only the initial H-1B visa be limited to 18 months and that any 
subsequent filings should be granted up to the full 3-year limit. A 
joint submission stated that early-stage companies have the least 
available bandwidth for effective compliance and any additional legal 
and compliance costs would be a burden unique to startups with an 
immigrant founder or key early hire.
    In light of the above concerns, some commenters proposed 
alternative validity periods for beneficiary owners. For example, 
commenters suggested that a standard 36-month validity period should be 
applied, reasoning that an across-the-board reduction in the validity 
period would severely impact founders' ability to innovate, experiment 
with new technologies, and secure investment. The commenters also said 
that the change to the validity period could encourage start-up 
founders to go to other countries. A commenter stated that a longer 
visa period and fewer renewals would improve the regulatory process for 
startups and recommended that the H-1B program follow the 30-month 
period for the International Entrepreneur Parole (IEP) pathway which 
allows a longer timeline to support success. A joint submission also 
noted that the 30-month timeline for IEP would make it a more 
attractive option for entrepreneurs, deterring them from the H-1B 
process. A couple of commenters mentioned that the limitation of the 
initial visa length and first renewal to 18 months is far too 
restrictive and should be retained at 3 years.
    Response: DHS understands that filing petitions more frequently may 
cause an administrative burden. However, DHS disagrees that limiting 
the initial and first extension validity period to 18 months is 
unnecessary; rather, it is an important safeguard against possible 
abuse or fraud. As stated in the NPRM, while DHS sees a significant 
advantage in promoting the H-1B program to entrepreneurs, DHS believes 
that guardrails for beneficiary-owner petitions are necessary to 
mitigate the potential for abuse of the H-1B program. 88 FR 72870, 
72906 (Oct. 23, 2023). Limiting the first two validity periods to 18 
months each will allow DHS adjudicators to review beneficiary-owned 
petitions more frequently, and limiting the nature of non-specialty 
occupation duties that may be performed will deter potential abuse and 
help maintain the integrity of the H-1B program. DHS selected 18 months 
for the first two validity periods as a balance between promoting 
entrepreneurship and maintaining program integrity. As an additional 
clarification, while a beneficiary's initial stay is limited to 18 
months, they may request an extension for an additional 18 months, and 
additional extensions for up to 3 years after that, for a maximum total 
of 6 years (unless eligible for an exception to the 6-year period of 
authorized admission limitation) like other H-1B workers. Further, DHS 
did not propose a minimum investment amount for beneficiary owners and 
is not adding one through this rulemaking.
    Comment: A few commenters suggested that DHS clarify rules for 
beneficiary-owner petitions, suggesting additional clarification around 
who is qualified to start a business, the type of businesses allowed, 
and who can sponsor themselves for an H-1B visa. A joint submission 
noted that the NPRM preamble explained that controlling ownership 
interest means ``the beneficiary owns more than 50 percent of the 
petitioner or [ ] the beneficiary has majority voting rights in the 
petitioner,'' \149\ but expressed concern that ``controlling interest'' 
lacks a precise regulatory definition in the proposed rule. The joint 
commenters suggested that DHS codify the definition within the 
regulations to ensure clarity as to which beneficiary-owners would be 
subject to this framework, rather than defining this in future USCIS 
Policy Manual guidance. The commenters recommended that the definition 
of ``control'' align with the alternatives provided in the L-1 
intracompany nonimmigrant visa category (e.g., at least 50 percent 
ownership; 50 percent ownership in a 50-50 joint venture with equal 
control and veto power, and less than 50 percent ownership with a 
controlling interest).
---------------------------------------------------------------------------

    \149\ 88 FR 72870, 72905.
---------------------------------------------------------------------------

    Response: DHS agrees that additional clarification would be 
beneficial in the regulatory text and is clarifying in new 8 CFR 
214.2(h)(9)(iii)(E) that ``controlling interest'' means that the 
beneficiary owns more than 50 percent of the petitioner or when the 
beneficiary has majority voting rights in the petitioner. Whether the 
beneficiary has majority voting rights in the petitioner will depend on 
the bylaws and other governing documents of the petitioning entity 
(e.g., if there are preferred shares that give certain owners greater 
voting rights than other owners with common shares), but it will 
generally reflect who controls the direction and management of the 
petitioning entity, including decisions pertaining to the employment of 
executives, which could include the beneficiary-owner's employment. DHS 
declines to adopt definitions from the regulations relating to the L-1 
nonimmigrant classification as those regulations relate to establishing 
a qualifying relationship for purposes of establishing eligibility for 
L-1 classification and may not readily apply in the context of a 
beneficiary-owner. Further, beneficiaries may still qualify as H-1B 
nonimmigrants even where they do not have a controlling ownership 
interest in the petitioner.
    Comment: Another commenter suggested that USCIS clarify the 
definition of ``owner'' and ``control,'' reasoning that these terms are 
not clear in the context of nonprofit organizations. Specifically, the 
commenter said that DHS did not provide clarity regarding for-profits 
and nonprofits and how sole ownership of a nonprofit would function 
under the proposed rule. The commenter warned that this lack of clarity 
could lead to confusion and the inconsistent application of the 
proposed regulations. Additionally, a research organization expressed 
concern that DHS failed to distinguish between nonprofit and for-profit 
corporations and their structures. The commenter said that if owning a 
``controlling interest'' is interpreted as ownership of stock or 
shares, the proposed rule would not apply to a noncitizen sole director 
of a nonprofit corporation that does not issue capital stock or shares 
for ownership. The

[[Page 103141]]

commenter requested that DHS expand the definition to include sole 
directors who incorporate a nonprofit or nonstock corporation as a 
United States employer with an EIN, and suggested a new definition.
    A couple of commenters expressed concern that the proposed 
provisions and requirements related to ``controlling interest'' do not 
account for high-growth companies at the later stages of the startup 
lifecycle during which an entrepreneur ``will typically hold smaller 
ownership stakes in the company.'' Specifically, a joint submission 
said that, at this later stage, the owner's stake shrinks as the start-
up sells equity to investors. The commenters wrote that the LCA wage 
requirements force many entrepreneurs to take on entry-level roles, as 
start-ups have limited cash reserves to pay market-rate salaries for 
CEO and other C-Suite roles. Additionally, the commenters reasoned that 
maintaining equity ownership provides greater economic benefit to 
owners compared with taking a higher salary. Thus, the joint commenters 
encouraged DHS to create a process allowing early-stage, high-growth 
entrepreneurs to hold CEO or other C-Suite titles while protecting 
against fraud and abuse. The commenters concluded that immigration 
processes need to account for start-up growth, reasoning that 
incentivizing entrepreneurs to maintain their equity stake to benefit 
from the regulations would disincentivize job creation.
    Response: As explained in the NPRM, DHS is setting reasonable 
conditions for when the beneficiary owns a controlling interest in the 
petitioning entity to better ensure program integrity. 88 FR 72870, 
72906 (Oct. 23, 2023). These proposed conditions will apply when a 
beneficiary owns a controlling interest, meaning that the beneficiary 
owns more than 50 percent of the petitioner or when the beneficiary has 
majority voting rights in the petitioner. DHS is specifically 
addressing situations where a potential H-1B beneficiary owns a 
controlling interest in the petitioning entity and is not imposing any 
restrictions regarding who is qualified to start a business, or the 
type of businesses allowed to petition for a beneficiary-owner.
    With respect to non-profit organizations, DHS recognizes that, in 
some cases, a beneficiary might not be able to establish a controlling 
interest in a non-profit organization, meaning the beneficiary owns 
more than 50 percent of the petitioner or has majority voting rights in 
the petitioner. However, the non-profit entity may still petition for 
the beneficiary as an H-1B nonimmigrant worker even where the 
beneficiary does not possess a controlling interest. Thus, DHS does not 
believe it is necessary to revise the provisions relating to 
beneficiary-owners to account for non-profit organizations.
    With respect to ``high growth companies'' where a potential 
beneficiary-owner may hold a smaller ownership in the company, DHS 
notes that the beneficiary-owner provisions would apply where the 
beneficiary has majority voting rights in the petitioner. Further, the 
entity may still file an H-1B petition on behalf of the beneficiary 
where the beneficiary does not possess a controlling interest in the 
petitioning entity. Therefore, DHS does not believe it is necessary to 
make changes to the beneficiary-owner provisions in response to this 
comment.
    Comment: A few commenters suggested additional measures to address 
fraud and abuse related to beneficiary-owned H-1B petitions. For 
example, a law firm proposed that when a company files an initial 
petition for a beneficiary-owner, it must submit a detailed business 
plan, and when the company files an extension on behalf of the 
beneficiary-owner, it must explain the progress made on the achievement 
of the goals specified in the business plan. While expressing concerns 
with program abuse by beneficiary-owned H-1B petitioners, another 
commenter suggested that beneficiary-owners should be required to pay 
the same wages to a minimum of five U.S. citizens in the company and 
should not be allowed to have H-1B holders constitute more than 10 
percent of the company's workforce. Another commenter suggested that 
the beneficiary-owners provisions should be complemented with increased 
site visits, with up-front penalties for those violating the program 
requirements. To deter program fraud, a commenter proposed that 
entrepreneurs receive a 2-year Employment Authorization Document (EAD) 
before applying for an H-1B visa, based on the company's performance. 
The commenter suggested that success could be measured through capital 
raised, U.S. citizens employed, jobs created, and revenue, and there 
could be lower thresholds for non-technology startup companies to avoid 
skewing applications towards the technology sector.
    Response: DHS declines to adopt these additional measures. DHS 
believes that the conditions discussed in the proposed rule for when 
the beneficiary owns a controlling interest in the petitioning entity 
are sufficient to help ensure program integrity. These conditions 
include the requirement that the beneficiary will perform specialty 
occupation duties authorized under the petition a majority of the time, 
that, notwithstanding some incidental duties, non-specialty occupation 
duties must be directly related to owning and directing the 
petitioner's business, and limiting the validity period for the initial 
petition and first extension of such a petition to 18 months each. DHS 
also notes that this final rule contains a number of provisions that 
are intended to enhance the integrity of the H-1B program, including 
provisions on the bona fide job offer requirement, third-party 
placement and site visits, and that these integrity provisions will be 
applicable to all H-1B petitions, including those involving 
beneficiary-owners. However, some of the suggestions, such as expressly 
requiring a beneficiary-owned petitioner to employ a certain number of 
U.S. citizens, raise a certain amount of capital, or provide proof of 
accomplishments towards the business plan, may be too restrictive 
especially during a new business's beginning stages when resources may 
be scarce and exact business plans may change. DHS also recognizes that 
different endeavors may have different capital or personnel needs, and 
therefore, setting minimum investment or staffing requirements may be 
too restrictive.
    Comment: Several commenters discussed concerns with wage 
requirements for beneficiary-owners. Specifically, commenters requested 
that DHS provide additional flexibility to beneficiary-owners in the 
context of DOL's prevailing wage requirements. One such commenter 
reasoned that many startups by beneficiary-owners with majority 
ownership may not see positive cash flow for a long period of time, 
which makes it challenging for owners to both adhere to wage 
requirements and make investments to grow their business. A couple of 
different commenters, echoing this concern, suggested that the 
prevailing wage requirements ``should be relaxed'' and instead the 
beneficiary-owner's credentials and expertise should be prioritized in 
the formative years of a practice. The commenter reasoned that such an 
approach would encourage entrepreneurs with specialized knowledge to 
develop their businesses and contribute to the U.S. economy. A 
different commenter said that the LCA requirements would complicate the 
proposed revisions for beneficiary owners, as startup founders would be 
bound to a high base salary despite

[[Page 103142]]

needing 2 to 3 years to become self-funded. Similarly, another 
commenter expressed concern that the rule does not go far enough to 
address challenges faced by H-1B entrepreneurs, such as minimum salary 
requirements. Thus, the commenter urged DHS to consider exempting H-1B 
entrepreneurs from the minimum salary requirements, suggesting an 
exemption period during the first 2 years of operation. The commenter 
also proposed that beneficiary-owners should demonstrate financial 
viability through alternative means, such as secured funding 
commitments or detailed business plans. The commenter reasoned that 
these measures would strengthen the H-1B program and encourage the 
creation of businesses that would contribute to long-term economic 
prosperity in the United States. Additionally, a joint submission wrote 
that the LCA wage requirements force many entrepreneurs to take on 
entry-level roles, as startups have limited cash reserves to pay 
market-rate salaries for CEO and other C-Suite roles.
    Response: DHS emphasizes that nothing in this final rule changes 
DOL's administration and enforcement of statutory and regulatory 
requirements related to LCAs, including requirements concerning the 
appropriate prevailing wage. See 8 U.S.C. 1182(n); 20 CFR part 655, 
subparts H and I. DHS does not have the authority to alter statutory 
requirements or DOL regulations related to LCAs, including requirements 
concerning the required wage, and cannot provide any exceptions to 
beneficiary-owners who are unable to adhere those requirements. 
Further, the beneficiary-owner provisions in this final rule aim to 
promote access for H-1B entrepreneurs while setting reasonable 
conditions to help ensure program integrity. DHS believes that allowing 
reduced wages for beneficiary-owners, even if lawful, would pose a 
significant risk to H-1B program integrity. Petitioners must pay the 
required wage, consistent with all statutory and regulatory 
requirements.
    Comment: Some commenters proposed additional flexibilities for 
beneficiary-owners. For example, a commenter suggested additional 
flexibility criteria for startups to allow them to adapt to changing 
product-market fit or satisfying market demand. A trade association 
proposed additional flexibilities through reduced hiring costs and 
application fees for legitimate U.S. startups. Finally, a commenter 
suggested that beneficiary-owners should not be included under the H-1B 
cap.
    Response: DHS declines to provide additional flexibilities for 
beneficiary-owners. The commenter did not specify any particular 
flexibility that would allow petitioners to adapt to changing product-
market fit or better satisfy a strong market demand, but to the extent 
that the commenter is suggesting, for example, a relaxation of 
requirements relating to amended petitions or maintenance of status, 
DHS declines to provide any special accommodations for beneficiary-
owners with respect to these requirements. When there is a material 
change in the terms and conditions of employment, the petitioner must 
file an amended or new H-1B petition with the corresponding LCA. 8 CFR 
214.2(h)(2)(i)(E). A change in the terms and conditions of employment 
of a beneficiary that may affect eligibility under section 
101(a)(15)(H) of the Act is a material change. Thus, where there is a 
material change, USCIS must determine whether the beneficiary will 
continue to be eligible for H-1B classification under the materially 
changed conditions. This is true whether or not the beneficiary owns a 
controlling interest in the petitioner, thus DHS declines to provide 
any special flexibility for beneficiary-owners with respect to the 
amended petition requirements. Similarly, beneficiaries, including 
beneficiary-owners, are required to abide by the terms and conditions 
of admission or extension of stay, as applicable. For H-1B 
nonimmigrants, this includes working according to the terms and 
conditions of the H-1B petition approval on which their status was 
granted and not engaging in activities that would constitute a 
violation of status, such as working without authorization.
    While commenters included additional suggestions regarding reducing 
filing fees and not including beneficiary-owners in the cap, DHS is not 
adopting these suggestions but notes that the USCIS Fee Schedule Final 
Rule provided reduced fees for nonprofits and small employers for 
certain applications and petitions.\150\ DHS further notes that 
Congress--not DHS--sets the annual 85,000 H-1B cap as well as the 
general parameters for cap exemption. See INA sec. 214(g)(1), (5).
---------------------------------------------------------------------------

    \150\ See ``U.S. Citizenship and Immigration Services Fee 
Schedule and Changes to Certain Other Immigration Benefit Request 
Requirements,'' 89 FR 6194, 6208 (Jan. 31, 2024) (explaining that 
businesses with 25 or fewer full-time equivalent employees will pay 
a $300 Asylum Program Fee instead of $600, and half of the full fee 
for Form I-129, but nonprofits will pay $0).
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13. Site Visits
    Comment: A few commenters, including individual commenters, 
expressed general opposition to the proposed change in the site visit 
provision without providing additional rationale. An individual 
commenter stated that site visits are burdensome on businesses. An 
individual commenter expressing opposition to the site visit provision 
commented that site visits are a ``violation of represented parties'' 
per the Model Rule of Professional Conduct 4.2, and USCIS is attempting 
to ``surprise'' applicants into sharing incriminating information.
    Response: As noted in the proposed rule, site visits are important 
to maintain the integrity of the H-1B program and to detect and deter 
fraud and noncompliance with H-1B program requirements. 88 FR 72870, 
72907 (Oct. 23, 2023). Cooperation with these visits is crucial to 
USCIS' ability to verify information about employers and workers, and 
petitioner's compliance with the terms and conditions of the H-1B 
petition. Although DHS recognizes that site visits can be a burden for 
petitioners, and take time for USCIS to perform, this rule does not 
increase the number of site visits or create any new site visit 
programs. Rather the rule is further clarifying the scope of the visits 
and consequences of noncompliance with a site visit.
    The commenter addressing ``Model Rule of Professional Conduct 4.2'' 
did not provide context or the text of such rule. To the extent that 
the commenter is referring to the rules of representation from the 
American Bar Association, DHS notes that those rules are not applicable 
to USCIS officers. However, USCIS officers ask permission to speak to a 
represented individual before proceeding without a representative 
present. If the represented individual wants their representative 
present, they can call them and have them present telephonically or 
request the site visit be rescheduled to occur when the representative 
is available. USCIS will generally honor such request to reschedule, 
but if the representative is not present at the agreed upon time and 
location, or the individual repeatedly requests to reschedule in an 
apparent attempt to avoid compliance with the site visit review, it is 
in the officer's discretion to determine if the entity or individual is 
not complying with this provision by seeking to not cooperate in the 
site inspection.
    Comment: A few individual commenters expressed general support for 
site visits without providing additional rationale, with some

[[Page 103143]]

specifically encouraging site visits at consulting firms. An individual 
commenter generally remarked that the site visit provision would 
enhance program transparency, accountability, and integrity. An 
advocacy group expressing appreciation for USCIS' authority to conduct 
site inspections urged USCIS to mandate site visits for certain 
employers, especially when employees are employed at third party work 
locations. The advocacy group also recommended ``pre-adjudication site 
checks'' for petitioners that depend on H-1B employees.
    Response: DHS agrees that site visits are an important part of 
ensuring transparency, accountability, and the integrity of the H-1B 
program. However, DHS did not propose in the NPRM to make site visits 
mandatory for specific petitioners and declines to do so at this time. 
Site visits are determined by a number of factors, including both 
random visits and those predicated on the existence of risk factors or 
fraud indicators.
    Comment: While expressing support for site visits, several 
commenters stated that USCIS should give employers the opportunity to 
rebut, provide additional information, or resolve questions raised 
during site visits prior to arriving at an adverse determination. A 
couple of these commenters noted that this would be in the best 
interest of H-1B beneficiaries. Similarly, a trade association 
suggested USCIS clearly detail the process it will follow after 
determining a failure or refusal to cooperate. The trade association 
stated that there are situations in which USCIS' inability to verify 
facts during a site visit does not necessarily equate to a petitioner 
intentionally refusing to cooperate, such as a third party 
misunderstanding. A company suggested that petitioners be able to 
arrange additional site visits or interviews to address an initial 
failure or refusal to cooperate, thus codifying a current practice 
among Fraud Detection and National Security Directorate (FDNS) 
officers. A legal services provider recommended that the site visit 
provision require USCIS to provide specific details to petitioners in 
the form of a report to address issues identified during an inspection. 
A trade association requested USCIS implement a system that decreases 
the frequency of site visits for employers that repeatedly demonstrate 
compliance.
    Response: As is current practice and captured in existing 
regulations, USCIS will generally not revoke an approval or deny a 
petition based on information from a site visit or inability to verify 
facts based on a lack of cooperation at a site visit without first 
giving the petitioner the opportunity to rebut and provide information 
on their behalf. See 8 CFR 103.2(b)(16), 214.2(h)(10) and (11). There 
may be instances where information from a pre-adjudication site visit 
or the inability to verify facts based on a lack of cooperation at a 
pre-adjudication site visit could result in the denial of the petition 
without additional notice to the petitioner, if the information 
uncovered or the inability to verify facts was derogatory information 
of which the petitioner was aware. DHS declines to add specific 
regulatory text concerning this issue, as site visits and subsequent 
adjudicative actions will continue to be governed by existing practice 
and existing regulations at 8 CFR 103.2(b)(16) and 214.2(h)(10) and 
(11) which govern the notice requirements. Petitioners will therefore 
generally have the opportunity to resolve issues that may arise during 
the site visit, including those identified by commenters. DHS declines 
to use a specific form to report issues that arise during a visit. 
Rather, USCIS officers will continue to issue NOIDs or NOIRs that 
provide sufficient derogatory information and details for the 
petitioner to respond to. DHS further notes that it is not a national 
practice for FDNS officers to always arrange additional site visits or 
interviews to address an initial failure or refusal to cooperate. 
However, it is in the officer's discretion to allow such a request, and 
if a petitioner is otherwise cooperative and requests to schedule a 
follow-up visit, FDNS may allow such a request.
    USCIS determines the frequency of site visits based on a number of 
factors, including random selection as part of the ASVVP. Although 
USCIS officers make efforts to reduce duplicative visits, DHS notes 
that each petition stands alone and information that is petition 
specific, such as the job location and duties, would not have been 
previously verified. As such, the successful completion of a prior site 
visit is not indicative that future problems will not exist.
    Comment: A trade association requested that USCIS clarify in the 
NPRM what actions constitute a refusal or failure to comply with USCIS 
site visits. A law firm also suggested that USCIS clarify the 
expectations and process for site visits under the proposed rule, 
including establishing a standard timeframe between site visits and any 
subsequent actions taken, and subjecting any revocations to appeal. The 
law firm added that revocations should be based on a ```clear and 
convincing evidence' standard.'' Lastly, the law firm emphasized the 
importance of collecting the names and title of any interviewees during 
site visits to ensure full transparency on the record.
    Response: As discussed in the proposed rule, DHS's goal is to 
provide transparency to the compliance review process so that entities 
and individuals subject to those processes understand that USCIS' 
inability to verify pertinent facts, including for failure to 
cooperate, may result in denial or revocation of the approval of a 
petition. 88 FR 72870, 72908 (Oct. 23, 2023). With this rule, DHS is 
codifying its existing authority and clarifying the scope of 
inspections and the consequences of a refusal or failure to fully 
cooperate with these inspections. To ``fully cooperate'' in this 
context means that entities will comply with the scope of the reviews, 
including: granting access to the premises, to include the employer's 
place of business and any site where the work is performed, making a 
representative of the petitioner or employer available for questions, 
submitting or allowing review of pertinent records, providing access to 
workers and allowing interviews with such employees to take place in 
the absence of the employer or employer's representative and at a 
location mutually agreed to by the employee and USCIS officers, which 
may or may not be on the employer's property.
    As described in the proposed rule, a petitioner or employer failing 
or refusing to cooperate ``could include situations where one or more 
USCIS officers arrived at a petitioner's worksite, made contact with 
the petitioner or employer and properly identified themselves to a 
petitioner's representative, and the petitioner or employer refused to 
speak to the officers or were refused entry into the premises or 
refused permission to review human resources records pertaining to the 
beneficiary. Failure or refusal to cooperate could also include 
situations where a petitioner or employer agreed to speak but did not 
provide the information requested within the time period specified, or 
did not respond to a written request for information within the time 
period specified.''
    DHS declines to add ``within the reasonable time specified'' to the 
regulations regarding site visit compliance and cooperation. USCIS 
issuance of notice and adjudicative decisions is already governed by 
existing regulations at 8 CFR 103.2(b)(16) and 214.2(h)(10) and (11). 
These regulations do not include a timeframe within which USCIS must 
issue a notice or decision. The amount of time that lapses between when 
a site visit takes place and when a notice or

[[Page 103144]]

decision is issued can vary depending on the specific facts of the 
case. Such factors could include time for additional USCIS fact finding 
or additional time for petitioners to reschedule a visit or respond 
with requested documentation. As such, DHS will not limit USCIS' 
ability to take action on a petition simply because a specific amount 
of time has lapsed since a site visit was undertaken. If USCIS officers 
need to request additional information from petitioners after the site 
visit, the deadline for submitting such information will be provided to 
the petitioner in writing. Additionally, per 8 CFR 214.2(h)(12), 
revocation on notice under 8 CFR 214.2(h)(11)(iii) of an H-1B 
petition's approval may be appealed to the Administrative Appeals 
Office.
    DHS declines to add a new standard of proof for revocations after 
site visits, as it remains the petitioner's burden to demonstrate 
eligibility for H-1B classification by a preponderance of the evidence. 
If USCIS is unable to verify pertinent facts required to demonstrate 
the petitioner's eligibility and continued compliance with the terms 
and conditions of the petition, and the petitioner does not overcome 
these findings and demonstrate eligibility by a preponderance of the 
evidence, then the petition's approval would be rightly revoked. The 
authority of USCIS to conduct on-site inspections, verifications, or 
other compliance reviews to verify information does not relieve the 
petitioner of its burden of proof or responsibility to provide 
information in the petition (and evidence submitted in support of the 
petition) that is complete, true, and correct. See 8 CFR 103.2(b).\151\ 
Moreover, USCIS has the authority to administer and enforce the INA, 
including provisions pertaining to the H-1B nonimmigrant 
classification. See INA 103(a)(1) and (3).\152\
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    \151\ ``In evaluating the evidence, `the truth is to be 
determined not by the quantity of evidence alone but [also] by its 
quality.' '' See Matter of Chawathe, 25 I&N Dec. 369, 376 (AAO 2010) 
(quoting Matter of E-M-, 20 I&N Dec. 77, 80 (Comm'r 1989)).
    \152\ See also INA 235(d)(3), 8 U.S.C. 1225(d)(3) (authorizing 
``any immigration officer'' . . . ``to administer oaths and to take 
and consider evidence of or from any person touching the privilege 
of any alien or person he believes or suspects to be an alien to 
enter, reenter, transit through, or reside in the United States or 
concerning any matter which is material and relevant to the 
enforcement of [the INA] and the administration of [DHS]'').
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    Regarding the request to collect names and titles of any 
interviewees, DHS notes that USCIS officers keep records of the 
individuals with whom they speak. To the extent practicable, USCIS 
seeks to protect the privacy of workers when using the information they 
have provided to support any adjudicative decision. However, USCIS must 
also adhere to 8 CFR 103.2(b)(16)(i), which states that for any 
decision based on derogatory information unknown to the petitioner, the 
petitioner will be advised of this and offered an opportunity to rebut 
the information, and to the extent that this information is necessary 
for the petitioner to respond to and rebut any identified deficiencies, 
USCIS will disclose that information in the notice of intent to deny or 
notice of intent to revoke.
    Comment: A law firm expressing support for the use of site visits 
to ensure program integrity noted that FDNS officers should be limited 
to inspecting whether the H-1B worker is: located where they are 
supposed to be per the LCA and visa petition, doing the work 
represented in the petition, and being compensated according to the 
petition. The law firm added that any data beyond these points are not 
appropriate to collect (e.g., the H-1B filing history of the 
petitioner). Similarly, a legal services provider urged USCIS to limit 
the scope of site visits to not include ``any other records'' or ``any 
other individuals'' that the investigating official deems pertinent. A 
company recommended that employers or third parties should be able to 
refuse government representatives access to certain facilities or 
records for ``reasonable business purposes.'' Similarly, the same 
company remarked that the NPRM should limit the types of documentation 
that can be requested in a compliance review in order to protect 
sensitive business information.
    Response: DHS declines to further limit the types of documents that 
can be reviewed or requested as part of the USCIS verification efforts. 
The purpose of a USCIS site visit is to verify the information provided 
by the petitioner, confirm that eligibility for the petition approval 
has been demonstrated by a preponderance of the evidence and to ensure 
that the beneficiary is or will be employed in accordance with the 
terms and conditions of the petition. The language of the new 
regulations makes clear that USCIS officers will limit their review to 
pertinent information, which includes information that was provided by 
the petitioner, material to eligibility, or needed to make a 
determination on continued compliance with the terms and conditions of 
the petition. This universe of information will vary according to the 
specific petition being reviewed. Because DHS does not limit the 
evidence used by petitioners to demonstrate eligibility and compliance 
with the terms and conditions of the petition, DHS likewise will not 
limit the types of evidence that may be requested by USCIS officers, as 
long as such evidence is pertinent to their inquiry.
    Concerning disclosure of ``sensitive business information,'' when 
requested evidence contains sensitive business information, 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 they 
believe it is too sensitive, the petitioner must also satisfy the 
burden of proof and runs the risk of denial if alternative evidence is 
insufficient to establish eligibility. Cf. Matter of Marques, 16 I&N 
Dec. 314, 316 (BIA 1977) (in refusing to disclose material and relevant 
information that is within his knowledge, the respondent runs the risk 
that he may fail to carry his burden of persuasion with respect to his 
application for relief).
    Comment: A trade association stated that the proposed rule lacks a 
``reasonableness standard'' and allows officials to request information 
or documentation at their discretion, even if it is not pertinent to 
the petition at hand; the trade association remarked that petitioners 
that resist potentially unnecessary lines of questioning could be 
deemed non-cooperative and have the petition in question, as well as 
others, unfairly revoked. The trade association also commented that the 
lack of a reasonableness standard creates a vague and indefinite time 
period for petitions to undergo review following site visits, which 
could hinder employers' ability to hire employees and perform work.
    Response: As noted in the proposed rule, site visits may include 
review of the petitioning organization's facilities, interviews with 
its officials, review of its records related to compliance with 
immigration laws and regulations, and interviews with any other 
individuals or review of any other records that USCIS may lawfully 
obtain and that it considers pertinent to verify facts related to the 
adjudication of the petition, such as facts relating to the 
petitioner's and beneficiary's eligibility and continued compliance 
with the requirements of the H-1B program. See new 8 CFR 
214.2(h)(4)(i)(B)(2). DHS declines to add any additional 
``reasonableness standard,'' as the new regulations sufficiently limit 
the universe of information that could be addressed in a site visit to 
that which is pertinent to eligibility and continued compliance with 
the terms and conditions of the petition. Further,

[[Page 103145]]

although USCIS follows up on site visits as soon as practicable, DHS 
will not add any timeframe requirement for those actions, as each case 
will be different, and could involve return visits at the petitioner's 
request that would be unnecessarily limited if a timeframe for action 
was implemented. It is also unclear how USCIS' timeline after a site 
visit would limit a petitioner's ability to hire and perform work, as 
there would be no impact until adjudicative action is taken and such 
action would be preceded by a NOID or NOIR.
    Comment: An advocacy group expressed opposition to the proposed 
changes to site visit policy, writing that it would give officers 
excessive authority to enter businesses or homes without prior notice 
and potentially invalidate many visas if one individual does not, or 
cannot, comply with requests. The advocacy group added that this power 
could be used to intimidate immigrant populations, who may be more wary 
of scams and fraud.
    Response: DHS notes this rule does not change the way that site 
visits are conducted and does not extend USCIS' authority to conduct 
site visits beyond what is already allowed in statute and regulations. 
The purpose of a site visit is to verify the information that was 
provided in the petition with review of an accurate and unrehearsed 
view of the work being performed. As such, site visits are generally 
unannounced. However, as part of the site visit program, USCIS officers 
do not enter businesses or homes without permission. USCIS officers 
carry identification that can be confirmed and as noted above, 
interviewees may request that the petitioner or representative join an 
interview telephonically or in person, or reschedule for a time where 
the representative can be present. As stated previously, failure or 
refusal to cooperate with a site visit may result in denial or 
revocation of the approval of any petition for workers who are or will 
be performing services at the location or locations that are a subject 
of inspection or compliance review. See new 8 CFR 214.2(h)(4)(i)(B)(2).
    Comment: A professional organization urged USCIS to amend 8 CFR 
214.2(h)(4)(i)(B)(2)(i) and redefine ``inability to verify facts'' to 
``inability to verify material facts,'' and ``compliance'' to 
``substantial compliance'' when referring to the adjudication of the 
petition and compliance with H-1B petition requirements. The 
organization proposed additional amendments to 8 CFR 214.2(h)(10)(ii) 
and (h)(11)(iii)(A)(2), suggesting that DHS change ``inaccurate'' to 
``materially inaccurate.''
    Response: DHS notes that the commenter refers to 8 CFR 
214.2(h)(4)(i)(B)(2)(i) but quotes language from 8 CFR 
214.2(h)(4)(i)(B)(2)(ii), and as such our response is in reference to 8 
CFR 214.2(h)(4)(i)(B)(2)(ii). DHS declines to add ``material'' to the 
new regulation at 8 CFR 214.2(h)(4)(i)(B)(2)(ii) because the regulation 
already states that the petition may be denied or an approval revoked 
if USCIS is unable to verify facts related to the adjudication of the 
petition and compliance with H-1B petition requirements. Consistent 
with the language of the regulation, USCIS officers will limit their 
review to pertinent information, which includes information that was 
provided by the petitioner, is material to eligibility, or is needed to 
make a determination on continued compliance with the terms and 
conditions of the petition. DHS likewise declines to add 
``substantial'' to this language because DHS is interested in the 
petitioner's continued compliance with all conditions and requirements 
of the H-1B petition.
    DHS also declines to amend 8 CFR 214.2(h)(10)(ii) and 
(h)(11)(iii)(A)(2). The grounds of denial and revocation regarding 
inaccurate statements work in conjunction with the certifications on 
the petition, H-1B registration, temporary labor certification, and 
labor condition application, which all require the petitioner or 
employer to certify that the information contained in those submissions 
is true and accurate. Inaccuracies in these submissions that may not by 
themselves be material to eligibility can raise doubts as to the 
accuracy and veracity of the overall submission. Such inaccuracies 
would also violate the certifications signed by the petitioner or 
employer. As such, inaccurate information and statements made as part 
of these submissions, which are required precursors to or part of the 
petition filing, may be a sufficient ground for denial or revocation of 
an approved petition. These provisions are intended to enhance program 
integrity, and DHS believes that amending them as suggested by 
commenters would introduce ambiguity and narrow their application in a 
manner that would contradict their purpose. Therefore, USCIS will 
retain the text of 8 CFR 214.2(h)(10)(ii) and (h)(11)(iii)(A)(2) as it 
was finalized in ``Improving the H-1B Registration Selection Process 
and Program Integrity,'' 89 FR 7456 (Feb. 2, 2024).
    Comment: Multiple commenters asked USCIS to provide notice to an 
employer or their attorney of record prior to a site visit. Several 
commenters requested that company representatives be present during and 
facilitate H-1B beneficiary interviews with USCIS, with a trade 
association remarking that this would deter scams. A couple of these 
commenters, including an advocacy group and a company, noted that the 
employer's presence could be at the employee's request.
    Response: USCIS site visits are intended to be an unrehearsed view 
of an employer's business and the beneficiary's work. As such, DHS will 
not require that notice be given to employers or representatives prior 
to any site visit. DHS likewise declines to require that employer 
representatives be present at the interview of beneficiaries or other 
individuals with pertinent facts. However, any individual being 
interviewed by USCIS officers may request the presence of their 
employer or their representative. The employer or representative may 
join the visit in person, telephonically, or request that an interview 
be rescheduled.
    DHS recognizes that workers providing information to USCIS officers 
during interviews can place the worker in a precarious position, but 
each individual will have their own preference as to whether or not to 
have their employer or representative present. USCIS will not ignore 
the individual's preference or request that the employer or their legal 
representative be present.
    Comment: A joint submission of attorneys commented that language in 
the NPRM noting that the presence of employers at inspection interviews 
can induce a chilling effect on H-1B employees is misplaced, as 
unannounced government inspections are more likely to induce such a 
chilling effect in employees. The joint submission further expressed 
concern that while the NPRM included language allowing such interviews 
to be conducted ``at a neutral location agreed to by the interviewee 
and USCIS away from the employer's property,'' the stress associated 
with potential visa revocation reduces a worker's comfort with voicing 
their true preference.
    Response: DHS disagrees with the commenters' assertions. Providing 
an employee the option to speak without the employer or employer's 
representative is important to ensuring the employee feels free to 
discuss concerns with USCIS. For example, an H-1B beneficiary who is 
not being paid the required wage by the petitioner may be more 
comfortable discussing this outside the presence of the employer. 
Although DHS appreciates that participating in site visit interviews 
can

[[Page 103146]]

be stressful for beneficiaries, allowing each individual the choice of 
whether to be interviewed either with or without their employer present 
allows individuals to participate in the interview at their greatest 
possible comfort level. DHS cannot presume to know each individual's 
preference.
    DHS understands that interviews by government officials can be an 
intimidating experience and that the outcome could impact the 
interviewees' immigration status. Interviews may also provide H-1B 
beneficiaries with an avenue to report fraud and abuse by unscrupulous 
employers, which is harmful to U.S. workers and H-1B beneficiaries. The 
proposed rule balances DHS's interest in maintaining the integrity of 
the H-1B program with interests of the petitioners and beneficiaries.
    Comment: Several commenters expressed concern with the proposed 
provision to expand site visits to employees' homes. While expressing 
support for USCIS' authority to conduct site visits to maintain the 
integrity of the H-1B program, multiple commenters urged USCIS to state 
that site visits would happen at the workplace or another location 
whenever possible, even for remotely working beneficiaries, but not at 
an employee's residence, due to safety and privacy concerns. A few of 
these commenters, including a business association, a joint submission 
and a trade association, stated that workers should be able to decline 
site visits at their home without it resulting in an adverse 
determination. The commenters provided sample language recommendations 
on the subject for incorporation into the final rule.
    A company expressed opposition to conducting site visits at worker 
residences without the support of the employer, stating that pertinent 
information such as duties, working conditions, wages, and 
qualifications can be verified at a company facility, while an 
employee's language, culture, or personal barriers may hinder efforts 
to glean compliance information at the employee's home and potentially 
lead to an unfair ``refusal to comply'' finding. A couple of companies 
urged USCIS to limit site visits to the workplace to reduce the risk of 
scams on H-1B beneficiaries. An individual commenter stated that site 
visits at employee residences would be an additional burden on 
employees.
    Several commenters stated that if site visits must occur at a 
beneficiary's home, workers should receive significant prior notice. A 
professional association added that beneficiaries should receive the 
option of a pre-arranged live video interaction rather than being 
required to allow government representatives to enter their home. An 
advocacy group similarly remarked that employees should be able to 
coordinate the ``timing, location and manner'' of an interview.
    An attorney suggested that the proposed provision could have a 
chilling effect on H-1B workers, as they may forgo remote work 
opportunities due to privacy concerns regarding home visits. The 
attorney therefore recommended that USCIS clarify if a site visit to a 
home office would require access beyond the physical workspace or the 
company-issued computer.
    Response: DHS declines to add a requirement that employees be given 
notice prior to a site visit at their residence. As noted, the purpose 
of a site visit is to verify the information that was provided in the 
petition with review of an accurate and unrehearsed view of the work 
being performed. As such, site visits are generally unannounced. DHS 
further declines to otherwise restrict the ability of USCIS officers to 
visit and interview employees at their assigned work location, 
including if it is the employee's residence. To do otherwise would 
create a loophole wherein any petitioner may exempt themselves from 
their evidentiary burden simply by locating workers at their 
residences. DHS appreciates the additional considerations that 
individuals might have when granting access to their home, but DHS 
finds that the ability to visit and interview at work sites is so 
integral to ensuring the integrity of the H-1B program, that it 
outweighs those considerations. Additionally, DHS notes that USCIS 
officers currently routinely visit individuals' residences in 
compliance visits for H-1B and a variety of other benefit requests, and 
as such, this is not a new activity for USCIS. As noted above, any time 
USCIS officers conduct a site visit or interview, the officers will 
request the individuals' permission to undertake the visit and 
interview, and if the individual is represented and wishes to have 
their representative present, they may ask their representative to join 
telephonically or reschedule the visit at a later time. USCIS officers 
also carry official identification which they will display to those 
being interviewed, regardless of where the interview is being 
conducted. If a beneficiary is unsure of the authenticity of the 
identification or whether the officer is acting in their official 
capacity, FDNS officers can provide supervisory contact information to 
verify their identities and official nature of the inquiry. With 
regards to the areas of a residence that might be accessed, USCIS 
officers would need only to access the work area and any portion of the 
residence that must be accessed to reach the work area.
    Comment: Several commenters, remarking specifically on third party 
facilities and records, stated that a third party employee's refusal or 
failure to speak with FDNS officers, grant them access to facilities, 
lead them to the correct worker, or permit them to review records, 
should not lead to a finding of noncompliance for the petitioner as 
petitioners are not responsible for third party actions. The company 
and a law firm added that inaccurate adverse findings from such 
situations can lead to significant consequences for businesses, and DHS 
should notify petitioners ahead of third party site visits so that 
petitioners can facilitate cooperation. The advocacy group expressed 
concern that this would have repercussions for H-1B visa holders, who 
could have their visa revoked due to third party noncompliance. 
Similarly, a couple of commenters urged USCIS to notify petitioners of 
planned visits to third party work locations, in the event that the 
third party does not communicate to the petitioner that a site visit 
occurred. Additionally, a law firm said that the third-party placement 
provision could create at least two difficulties for both the FDNS 
officer and the service provider in the case of site visits, including 
that the receptionist for the building owned by the end-client may have 
no knowledge of the presence of a contractor employee who is working 
remotely most of the time and that the service provider has no control 
over who the end-client may grant access to its premises. The end-
client receptionist may deny admission to the FDNS officer. The 
commenter recommended that in this case, the FDNS officer should not 
automatically infer that the petition is fraudulent. A joint submission 
urged USCIS to protect petitioners and beneficiaries with regard to 
third party placements, such that findings regarding unaffiliated on-
site H-1B beneficiaries employed by a third party do not impact the 
petitioner or beneficiaries that are not the subject of the visit. A 
trade association remarked that the proposed provision could be invoked 
unfairly, as requiring third parties to provide evidence in support of 
another employer's petition could be used to ``argue a joint-employer 
relationship exists,'' even when one does not. An advocacy group 
expressed concern towards employees at third party sites being asked to 
share sensitive

[[Page 103147]]

information about individuals that are not their direct employees, 
adding that it is unreasonable to impose this potential liability on 
them.
    Response: As noted in the NPRM, DHS is clarifying that an 
inspection may take place at the petitioning organization's 
headquarters, satellite locations, or the location where the 
beneficiary works or will work, including the beneficiary's home, or 
third-party worksites, as applicable. 88 FR 72870, 72907 (Oct. 23, 
2023). DHS's ability to inspect various locations is critical because 
the purpose of a site inspection is to confirm information related to 
the petition, and any one of these locations may have information 
relevant to a given petition that cannot be ascertained by only 
visiting the petitioner's headquarters. The work performed by the 
beneficiary is a key element of H-1B eligibility and as such, the 
worksite is pertinent. There is no requirement that a petitioner place 
the beneficiary at a third-party location; however, if a petitioner 
chooses to petition for a beneficiary that is placed at a third-party 
location, it remains the petitioner's burden to demonstrate 
eligibility, meet all requirements of the H-1B petition, and employ the 
H-1B worker consistent with the terms of the approved petition. To 
allow otherwise would create an exemption wherein placing a beneficiary 
at a third party would allow a petitioner to circumvent the 
requirements of the H-1B program by rendering the beneficiary outside 
the scope of the compliance review process. The language of this rule 
makes clear the responsibilities of both the petitioner and any third-
party client and such transparency will allow all parties to make 
decisions regarding their level of cooperation with full knowledge of 
the potential implications of a lack of cooperation.
    As previously noted, the purpose of a site visit is to observe an 
unrehearsed version of the beneficiary's work, the petitioner's 
organization, and the operations of a third-party, if applicable. As 
such, site visits are generally unannounced and DHS declines to add a 
requirement to notify petitioners before third-party sites are visited. 
However, petitioners can inform third-party clients of the possibility 
of a site visit for any H-1B worker that is placed at a third-party 
location, so that the third-party client can be prepared for how to 
handle a visit and cooperate during the visit. Moreover, the petitioner 
will be given notice of any deficiency identified before USCIS takes 
any adjudicative action based on the results of a site visit to a 
third-party location. Further, if USCIS is unable to verify pertinent 
facts to confirm eligibility and compliance with the terms and 
conditions of the H-1B petition, including due to noncooperation at a 
third-party work site, USCIS may consider those findings beyond the 
petition that was subject to the site visit, if those findings call 
into question whether other petitions that list the same worksite 
demonstrate eligibility and continued compliance. However, as noted, 
USCIS generally will not take any adjudicative action based on site 
visit findings on any petition without providing the petitioner with 
notice and the opportunity to rebut the findings.
    Regarding concerns that cooperation during a site visit at a third-
party site could render the third party to assume some liability or be 
considered a joint employer, DHS notes that USCIS currently undertakes 
site visits at third party locations and the commenters have provided 
no evidence that such a problem exists under the current site visit 
process. This rule is not increasing or changing the parameters of site 
visits, but rather is adding transparency about the potential 
consequences of non-cooperation if USCIS is unable to verify pertinent 
facts about the petition. It is unclear how cooperation with a USCIS 
site visit, including providing information about a beneficiary's work 
for a third-party client, would create a joint employer relationship 
where one does not already exist under applicable laws. Likewise, it is 
unclear how providing information concerning a beneficiary that is 
placed at a third-party worksite would indicate that the third-party 
client was assuming any liability beyond what exists currently in the 
business relationship with the petitioner, and the commenter does not 
elaborate or provide any examples of such a concern. If third-party 
clients or petitioners are concerned about such liability, this rule 
provides the transparency for what both parties can expect with regards 
to site visits and consequences, and petitioners and third-party 
clients are welcome to utilize this information to structure their 
relationships in a way that would alleviate these concerns.
    Comment: A few organizations stated that audit and enforcement 
powers for the H-1B program should lie with DOL; a research 
organization supported the need for site visits, citing statistics on 
fraud uncovered in FDNS inspections, but clarified that an agency 
focused on labor standards should conduct them. A few commenters 
expressed that the site visit provision oversteps USCIS' authority, 
writing that site visits or inspections should fall within the purview 
of Immigration and Customs Enforcement (ICE). Similarly, a research 
organization urged DHS to rescind its policy memorandum Guidelines for 
Enforcement Actions in or Near Protected Areas, stating that no 
``robust worksite enforcement'' can take place while ICE is constrained 
by that memo.
    Response: DHS disagrees with commenters who claim that H-1B site 
visits should be conducted only by DOL. Both USCIS and DOL have 
important roles to play in the oversight of the H-1B program. USCIS 
officers conduct verification and compliance reviews, including on-site 
verifications to ensure eligibility for petition approval and 
compliance with the terms and conditions of the H-1B petition filed 
with USCIS. The focus of these reviews is on information that is needed 
by USCIS to verify facts related to the adjudication of the petition, 
such as facts relating to the petitioner's and beneficiary's 
eligibility and continued compliance with the requirements of the H-1B 
program. Such information goes beyond the labor standards overseen and 
enforced by DOL. The occurrence of a review by another agency does not 
absolve the employer of its responsibility to cooperate with USCIS 
verification and compliance reviews, including on-site inspections. It 
remains the petitioner's burden to demonstrate eligibility for the 
benefit sought.\153\
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    \153\ See INA sec. 291, 8 U.S.C. 1361; Matter of Simeio 
Solutions, LLC, 26 I&N Dec. 542, 549 (AAO 2015) (``It is the 
petitioner's burden to establish eligibility for the immigration 
benefit sought.''); Matter of Skirball Cultural Ctr., 25 I&N Dec. 
799, 806 (AAO 2012) (``In visa petition proceedings, the burden of 
proving eligibility for the benefit sought remains entirely with the 
petitioner.'').
---------------------------------------------------------------------------

    DHS further disagrees with the assertion that conducting site 
visits oversteps USCIS' authority and that such visits should be 
conducted by ICE. As noted in the NPRM, USCIS has the authority to 
conduct site visits under INA sections 103(a), 214(a), 235(d)(3), and 
287(b), 8 U.S.C. 1103(a), 1184(a), 1225(d)(3) and 1357(b); sections 
402, 428, and 451(a)(3) of the HSA, 6 U.S.C. 202, 236, and 271(a)(3); 
and 8 CFR 2.1. As noted in the NPRM, USCIS has the authority to conduct 
site visits under INA sections 103(a), 214(a), 235(d)(3), and 287(b), 8 
U.S.C. 1103(a), 1184(a), 1225(d)(3) and 1357(b); sections 402, 428, and 
451(a)(3) of the HSA, 6 U.S.C. 202, 236, and 271(a)(3); and 8 CFR 2.1. 
88 FR 72870, 72906 (Oct. 23, 2023). USCIS conducts inspections, 
evaluations, verifications, and compliance reviews, to ensure that a 
petitioner and beneficiary are eligible for the benefit sought and that 
the petitioner is in compliance with all laws

[[Page 103148]]

before and after approval of such benefits. Importantly, USCIS 
inspections, verifications, and compliance reviews are not enforcement 
actions, but are rather conducted for the purpose of information 
gathering to ensure that entities remain in compliance with the terms 
and conditions of the H-1B petition that was filed with USCIS.
    Regarding the mentioned policy memorandum, USCIS does not 
anticipate that the requirements of that memorandum would interfere 
with the activities of USCIS officers conducting on-site inspections in 
a way that would limit their ability to interview pertinent 
individuals. To the extent that the commenter is discussing only the 
impact of the memo on ICE, that is outside the scope of this rule.
    Comment: A few commenters stated that the site visit provision and 
the possibility of arriving at an adverse determination following a 
site visit denies petitioners and beneficiaries due process under the 
law. A joint submission of attorneys further clarified that authorizing 
site inspections without the presence of the employer or their 
representatives violates employees' due process rights.
    Response: As noted above, any represented individual may request 
that their legal representative be present during an interview. This 
could be accomplished by the representative joining the interview in 
person or telephonically or requesting to have the interview 
rescheduled to a later time when the representative could be present. 
Furthermore, as previously stated, no denial or revocation for USCIS' 
inability to verify pertinent facts from a site visit would occur 
without the petitioner first being given notice of USCIS' finding of 
noncompliance and an opportunity to rebut such a finding in compliance 
with 8 CFR 103.2(b)(16). Furthermore, as previously stated, no denial 
or revocation for USCIS' inability to verify pertinent facts from a 
site visit would occur without the petitioner first being given notice 
of USCIS' finding of noncompliance and an opportunity to rebut such a 
finding in compliance with 8 CFR 103.2(b)(16).
    Comment: A few commenters expressed concern that the proposed site 
visit provision is unlawful under the Homeland Security Act of 2002 
(HSA), writing that the HSA authorizes USCIS for adjudicative functions 
only and not investigative or interrogative functions. The commenters 
also remarked that the NPRM also violates E.O. 12988, as the site visit 
provision does not minimize litigation, provide a clear legal standard, 
or reduce burdens. The joint submission of attorneys added that INA 
sec. 235(d)(3) does not authorize USCIS to conduct site visits, but 
rather ``to `administer oaths . . . and consider evidence of or from 
any person' '' without an administrative subpoena; the commenters also 
noted that in the case of neglect or refusal to respond to a subpoena 
during a site visit, the correct course of action is to involve any 
court of the United States.
    Response: As discussed in detail above, DHS disagrees with 
commenters' assertion that it lacks legal authority to conduct on-site 
inspections through the USCIS Fraud Detection and National Security 
(FDNS) Directorate. The site visits and inspections conducted by FDNS 
are authorized through multiple legal authorities. The Secretary of 
Homeland Security is authorized to administer and enforce the 
immigration laws. INA sec. 103(a); 8 U.S.C. 1103(a).\154\ USCIS also 
has the ``authority to interrogate aliens and issue subpoenas, 
administer oaths, take and consider evidence, and fingerprint and 
photograph aliens under sections 287(a), (b), and (f) of the INA, 8 
U.S.C. 1357 and under 235(d) of the INA, 8 U.S.C. 1225(d).'' \155\ 
Further, regulations support the FDNS activities that are described in 
this rule. For example, 8 CFR 1.2, defines ``immigration officer'' to 
include a broad range of DHS employees including immigration agents, 
immigration inspectors, immigration officers, immigration services 
officers, investigators, investigative assistants, etc. As duly 
appointed immigration officers, FDNS officers may question noncitizens 
based on the authority delegated by the Secretary of Homeland Security. 
Furthermore, 8 CFR 287.8 specifically sets out standards for 
interrogation and detention not amounting to arrest, wherein 
immigration officers can question anyone so long as they do not 
restrain the freedom of the person they are questioning.
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    \154\ Additionally, pursuant to 8 CFR 2.1, all authorities and 
functions of the Department of Homeland Security to administer and 
enforce the immigration laws are vested in the Secretary of Homeland 
Security. The Secretary of Homeland Security may, in the Secretary's 
discretion, delegate any such authority or function to any official, 
officer, or employee of the Department of Homeland Security, 
including delegation through successive redelegation, or to any 
employee of the United States to the extent authorized by law.
    \155\ See Delegation 0150.1(II)(S).
---------------------------------------------------------------------------

    The Board of Immigration Appeals has recognized that the reports 
produced by FDNS based on site visits and field investigations are 
``especially important pieces of evidence.'' \156\ These investigations 
and reports that result from them help ensure that adjudicative 
decisions are made with confidence by providing information that would 
otherwise be unavailable to USCIS.\157\
---------------------------------------------------------------------------

    \156\ Matter of P. Singh, 27 I&N Dec. 598, 609 (BIA 2019).
    \157\ Mestanek v. Jaddou, 93 F.4th 164, 172 (4th Cir. 2024) 
(holding in the context of marriage fraud in the I-130 immigrant 
petition context that ``[i]n allocating USCIS a set of nonexhaustive 
functions, Congress did not intend to hamstring USCIS's ability to 
fulfill the statutory mandate to investigate cases before 
adjudicating them.'').
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14. Third-Party Placement (Codifying Policy Based on Defensor v. 
Meissner (5th Cir. 2000))
    Comment: Numerous commenters voiced general support for the third-
party placement provision on the grounds that it would increase 
accountability, decrease fraud, and protect American workers. An 
advocacy group voiced support for DHS's efforts to reduce fraud in the 
H-1B program and to ``ensure that petitioners are not circumventing 
specialty occupation requirements,'' by making it clear that the work 
an individual performs for a third party must be in a specialty 
occupation and that the work for the third party is subject to the same 
oversight as direct employers. An individual commenter stated that 
USCIS should ``tie the requirements to the end client.'' A research 
organization also voiced support for considering the ``third-party 
job'' as the relevant job for ``specialty occupation'' determination.
    An attorney writing as part of a form letter campaign cited 
Defensor v. Meissner, 201 F.3d 384 (5th Cir. 2000), and the example 
provided in the NPRM describing an employee who is placed full time by 
the petitioner in a third party organization, rather than merely 
providing a service to the third party on behalf of the petitioner. The 
attorney said that in such a scenario, it is reasonable to rely on the 
third party's requirements for the position and to require petitioners 
to include information about the third party's requirements. The 
campaign supported the third-party placement provision as consistent 
with the adjudication of H-1B petitions that involve placement of an 
employee at a third party for a substantial part of their employment 
following Defensor.
    Response: DHS agrees with the commenters that this provision will 
help clarify H-1B eligibility requirements and maintain H-1B program 
integrity, specifically by ensuring that petitioners are not 
circumventing specialty occupation requirements by imposing token 
requirements or requirements that are not normal to the third party. In

[[Page 103149]]

Defensor v. Meissner, 201 F.3d 384 (5th Cir. 2000), the court 
recognized that, if only the petitioner's requirements are considered, 
then any beneficiary with a bachelor's degree could be brought to the 
United States in H-1B status to perform non-specialty occupation work, 
as long as that person's employment was arranged through an employment 
agency that required all staffed workers to have bachelor's degrees. 
Therefore, DHS agrees that, at times, it is reasonable to rely on the 
third party's minimum requirements rather than those of the employer 
responsible for placement.
    Comment: A couple of individual commenters voiced general 
opposition to the provision, stating ``USCIS seeks to eliminate 
staffing companies from the (H-1B) visa category.''
    Response: DHS disagrees that the third-party placement provision 
will eliminate staffing companies from the H-1B visa program. As stated 
in the NPRM, the third-party placement provisions are consistent with 
longstanding USCIS practices and are intended to clarify that, where a 
beneficiary is staffed to a third party, USCIS will look to that third 
party's requirements for the beneficiary's position, rather than the 
petitioner's stated requirements, in assessing whether the proffered 
position qualifies as a specialty occupation. 88 FR 72870, 72908 (Oct. 
23, 2023). This will help ensure that petitioners are not circumventing 
specialty occupation requirements by imposing token requirements or 
requirements that are not normal to the third party. The rule does not 
prohibit staffing companies, or other third-party arrangements, from 
participating in the H-1B program. Rather, the rule clarifies the 
circumstances under which it is reasonable for USCIS to consider the 
requirements of the third party as determinative of whether the 
position is a specialty occupation.
    Comment: Several commenters called the third-party placement 
provision confusing for petitioners and adjudicators and said that it 
creates the risk of arbitrary and inconsistent enforcement, with higher 
rates of RFEs and NOIDs. The commenters said that the ``staffing'' 
versus ``providing services'' distinction is novel and lacks foundation 
in law and historical practice. The commenters, along with an advocacy 
group and a trade association stated that the distinction between 
``staffing'' and ``providing services'' could easily be misinterpreted 
by adjudicators such that every time an H-1B professional is placed at 
a third-party company, the adjudicator would want to look at what is 
required for similar roles at that company. Several of these commenters 
said, for example, that adjudicators might mistakenly conclude that the 
third party does not normally require a degree or its equivalent for 
the beneficiary's position simply because it does not require so from 
less-skilled employees within its own workforce, relying on foreign 
talent on H-1B visas to satisfy its needs for higher-skilled labor. The 
advocacy group voiced concern that the provision would require IT 
services companies to prove they provide services and not ``staffing,'' 
given the significant distinction in requirements proposed for the two 
types of firms. Another law firm voiced concern that the binary 
distinction between an H-1B ``service provider'' versus a ``staffed 
worker'' who becomes part of that third party's organizational 
hierarchy by filling a position in that hierarchy, with the commenter 
saying that, in practice, H-1B workers are integrated in the end-
client's organizational hierarchy on a ``continuum.''
    Response: DHS disagrees that the provision ``lacks foundation in 
law or historical practice.'' As stated in the NPRM, this provision is 
generally consistent with longstanding USCIS practice and is also 
consistent with the decision in Defensor v. Meissner, 201 F.3d 384 (5th 
Cir. 2000). 88 FR 72870, 72909 (Oct. 23, 2023). This provision is 
consistent with the statute and relevant to determining whether the 
beneficiary will be employed in a specialty occupation.
    DHS also disagrees that the distinction in new 8 CFR 
214.2(h)(4)(i)(B)(3) between a beneficiary being staffed to a third 
party and providing services to a party is unclear or that it will lead 
to inconsistent adjudications. As explained in the NPRM, a beneficiary 
who is ``staffed'' to a third party becomes part of that third party's 
organizational hierarchy by filling a position in that hierarchy, even 
when the beneficiary technically remains an employee of the petitioner. 
88 FR 72870, 72908 (Oct. 23, 2023). By contrast, DHS explained that, 
for example, a beneficiary would be providing services to a third-party 
where they were providing software development services to that party 
as part of the petitioner's team of software developers on a discrete 
project, or where they were employed by a large accounting firm 
providing accounting services to various third-party clients. In these 
examples, the beneficiary is not ``staffed'' to the third-party because 
the third-party does not have employees within its organizational 
hierarchy performing those duties in the normal course of its business 
and does not have a regular, ongoing need for the work to be performed. 
USCIS will make the determination as to whether the beneficiary would 
be ``staffed'' to a third party on a case-by-case basis, taking into 
consideration the totality of the relevant circumstances. As is 
consistent with current practice, USCIS will review documentation in 
the petition including the petitioner's description of the services to 
be provided to determine if there are indications that a beneficiary is 
filling an otherwise permanent position at the third-party rather than 
simply providing services or work on a discrete project for that third 
party. In USCIS's experience, it is rare that a beneficiary is staffed 
to a third party rather than providing services for them.
    Comment: A trade association voiced concern over the case-by-case 
approach and the limited examples provided to determine whether a 
beneficiary is ``staffed'' to a third party which the commenter said 
leaves ambiguity and makes it challenging to predict how USCIS will 
treat a particular scenario and what documentation would be necessary 
to establish that a beneficiary is not ``staffed.'' The commenter said 
that in the current business environment, companies often outsource 
tasks without integrating external service providers into their 
organizational structure, and the dynamics of collaboration and 
separation of roles are often not explicitly detailed in the contracts 
governing the relationship between entities. The commenter said that in 
such a scenario, it is unclear how USCIS would distinguish between 
staffing arrangements and the provision of services, placing an 
excessive burden not only on employers but also on USCIS in the form of 
increased RFEs.
    Response: DHS disagrees with the commenters. USCIS will assess and 
weigh all relevant aspects of the relationships between the different 
entities receiving the beneficiary's services. If the beneficiary will 
work for a third party and become part of that third party's 
organizational hierarchy by filling a position in that hierarchy, the 
beneficiary will be considered ``staffed'' to the third party. In this 
scenario, the actual work to be performed by the beneficiary must be in 
a specialty occupation based on the requirements of the third party. 
Alternatively, in a scenario where a beneficiary provides services to 
various third-party clients on discrete projects or is merely providing 
services to various third-party clients without becoming a part of a 
third

[[Page 103150]]

party's regular operations, the third-party provision would not apply.
    DHS does not anticipate an increase in RFEs since this provision is 
consistent with long-standing USCIS practice. In Defensor v. Meissner, 
201 F.3d 384 (5th Cir. 2000), the court recognized that, if only the 
petitioner's requirements are considered, then any beneficiary with a 
bachelor's degree could be brought to the United States in H-1B status 
to perform non-specialty occupation work, as long as that person's 
employment was arranged through an employment agency that required all 
staffed workers to have bachelor's degrees. This result would be the 
opposite of the plain purpose of the statute and regulations, which is 
to limit H-1B visas to positions that require specialized education to 
perform the duties.
    Comment: A joint submission stated that the reference to third-
party staffing arrangements and their job descriptions is not legally 
relevant to a petition to employ a specialty occupation worker. The 
commenters said that a ``bedrock principle'' of the H-1B program is 
that the merits of a petition should be considered based on the 
circumstances of the specific job offer that is extended to the 
beneficiary in that petition and that the placement of a worker at a 
third-party location is not directly connected or correlated to that 
third-party's hiring practices. The commenters stated that businesses 
purchase professional services from other businesses specifically 
because they are unable to perform such services internally, citing the 
example, among others, of a thoracic surgeon performing ambulatory 
surgeries for a sister hospital where that specialty does not exist. 
The commenters said that there is no need for a reference to a specific 
third-party's job descriptions as they are unlikely to be related to 
the facts of the petition, adding that such a reference would confuse 
adjudicating officers and result in inconsistent adjudications that are 
unsupported by the statutory guidelines.
    Response: DHS disagrees with the comment that ``third-party 
staffing arrangements and their job descriptions are not legally 
relevant to a petitioner's filing to employ a specialty occupation 
worker.'' However, DHS agrees that ``the merits of a petition should be 
considered based on the circumstances of the specific job offer.'' For 
purposes of clarification, DHS has provided an explanation of the 
difference between a petitioner who provides services in a specialty 
occupation to a third party and a petitioner who provides staffing to a 
third party where the beneficiary will become part of that third 
party's organizational hierarchy by filling a position in that 
hierarchy. DHS defines ``staffed'' to mean that the beneficiary would 
be contracted to fill a position in the third party's organization. 
Using the commenter's example, where a thoracic surgeon performs 
ambulatory surgery services for a sister hospital, USCIS generally 
would not consider the requirements of the third-party sister hospital 
as determinative of whether the position is a specialty occupation, 
provided that there is no vacant permanent position for an ambulatory 
surgeon in the third party's organization, the beneficiary's services 
are specialized, individualized, or otherwise outside the normal 
operations of the sister hospital, or the beneficiary is not considered 
to be filling a position in the third party's organization.
    Comment: A company stated that it is unclear how DHS would 
determine whether a beneficiary has become ``part of the third party's 
organizational hierarchy'' and what specific indicators would be used 
to make this determination, other than to assert that it would take 
into consideration ``the totality of the relevant circumstances,'' and 
that it is unknown whether DHS plans to consider the source of pay, 
employee benefits, work equipment, work schedules, and work location 
for the contract worker. The commenter said that it appears that DHS 
plans to focus primarily on supervisory and reporting relationships 
within the third-party organizational hierarchy and consequently, would 
not be able to distinguish staffing from contract service positions.
    The joint submission said that there is no clear explanation in the 
preamble or the proposed regulatory language of what ``filling a 
position'' in the organizational hierarchy of a client means or what 
parameters apply, voicing concern that it is not clear how USCIS would 
ensure that adjudicators flesh out the distinction between a staffing 
arrangement and the provision of services consistently to determine 
which party should be called upon to state the degree requirements.
    Response: DHS acknowledges that there are differences between 
staffing companies and corporate entities with which another entity has 
engaged for the delivery of specialty occupation services. To provide 
additional clarity, USCIS considers factors such as the nature of the 
petitioning entity's and receiving third party's normal business 
activities, the general services provided by the involved parties, the 
work that the beneficiary will perform, and the organizational 
structure of the petitioning entity and receiving third party.\158\ 
This does not generally include analyzing the source of pay, employee 
benefits, work equipment, work schedules, and work location for the 
contract worker. Rather, USCIS would typically consider evidence such 
as master services agreements, statements of work, letters from end 
clients, organizational charts, staffing descriptions, and company 
descriptions to determine if the beneficiary will become part of that 
third party's organizational hierarchy by filling a position in that 
hierarchy.
---------------------------------------------------------------------------

    \158\ See, e.g., In re 31014012, 2024 WL 3667879, at *2 (AAO May 
6, 2024) (``The nature of a petitioner's business operations along 
with the specific duties of the proffered job are also considered. 
We must evaluate the employment of the individual and determine 
whether the position qualifies as a specialty occupation. See 
Defensor, 201 F.3d 384.'').
---------------------------------------------------------------------------

    For example, an IT consulting company specializes in software 
development and has been contracted to provide services to a third-
party real estate company to develop a software program that meets the 
real estate company's specific needs. In assessing whether the position 
qualifies as a specialty occupation, although the petitioning entity 
will provide services to a third party, it would not be reasonable to 
look to the real estate agency's (third party's) degree requirements as 
determinative of whether the work to be performed will be a specialty 
occupation. The petitioning IT consulting company normally offers 
software development services, and the real estate agency's normal 
business hierarchy does not include software developers. In this 
scenario, because the beneficiary will perform services in software 
development, not real estate, USCIS would look to the petitioner's 
degree requirements as determinative of whether the work to be 
performed at the real estate agency will be a specialty occupation.
    In another example, the AAO has found that where an end-client is 
familiar with and normally employs personnel in the proffered position 
(e.g., the client needs supplemental contracted personnel to augment 
their regular staff), the client likely possesses the knowledge of what 
duties the beneficiary would engage in, and the requirements in which 
to perform those responsibilities.\159\ This is a scenario in which the 
duties and the qualifications to perform in the proffered position as 
required by the third party entity where the beneficiary would actually 
perform their work would be controlling. In such

[[Page 103151]]

a case, USCIS may request additional evidence to determine the 
requirements for the position and to confirm whether the beneficiary 
will be staffed to the end client such that the end-client's 
requirements would control.
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    \159\ In re 5037859, 2019 WL 6827396 (AAO Nov. 7, 2019).
---------------------------------------------------------------------------

    Comment: A couple of commenters said that the proposed third-party 
placement provision would lead to administrative burdens for 
petitioning employers and their clients, with a trade association and a 
law firm stating that it would be difficult for the sponsoring employer 
to obtain such documentation from a client. One of the individual 
commenters, along with a business association, also stated that the 
provision would be arbitrary and capricious because it disregards 
established departmental policy without explanation and lacks 
evidentiary support. The individual commenter specifically cited text 
from a 1995 Policy Memo: ``The submission of [contracts between the 
employer and the alien work site] should not be a normal requirement 
for the approval of an H-1B petition filed by an employment contractor. 
Requests for contracts should be made only in those cases where the 
officer can articulate a specific need for such documentation'' and 
``[t]he mere fact that a petitioner is an employment contractor is not 
a reason to request such contracts.'' The commenter said that under the 
proposed rule--and unlike the Defensor-based scheme--adjudicators would 
be required to decide in every case involving third-party placements 
whether the beneficiary would be ``staffed'' to or merely ``provide 
services'' to a third party, contradicting the 1995 Policy Memo. The 
commenter, along with a law firm, said that the provision would also be 
arbitrary and capricious due to lacking adequate justification. The 
commenter, along with the business association said that DHS's concern 
that petitioners are circumventing specialty occupation requirements by 
imposing token requirements or requirements that are not normal to the 
third party is ``rank speculation.'' The commenters added that DHS 
``offers no explanation'' as to why it is concerned that some employers 
might ``impos[e] token requirements'' and fails to justify the burden 
this provision would impose on all contractors who utilize the H-1B 
visa program and their clients.
    Response: DHS disagrees that the third-party placement provision 
would lead to administrative burdens for petitioning employers and 
their clients. Petitioners should be able to provide evidence of the 
third party's requirements for the beneficiary's position through 
documents that are generated in the normal course of the relationship 
(e.g., a Master Services Agreement or statement of work) or are 
reasonably obtainable from the third party (e.g., a letter from the 
client). Documents showing the third party's requirements for the 
position will only be necessary in cases where the beneficiary is being 
staffed to the third party. DHS also disagrees that the third-party 
provision is ``arbitrary and capricious'' and that it disregards 
established departmental policy without explanation. To the contrary, 
this provision is consistent with longstanding USCIS practice.\160\ 
Further, in Defensor v. Meisner,\161\ the Fifth Circuit Court of 
Appeals recognized that if only the petitioner's requirements are 
considered, then any beneficiary with a bachelor's degree could be 
brought to the United States in H-1B status to perform non-specialty 
occupation work, as long as that person's employment was arranged 
through an employment agency that required all staffed workers to have 
bachelor's degrees. In the instance of an employer imposing token 
degree requirements on its employees while having no valid reason, a 
degree requirement alone is insufficient to establish that the 
beneficiary will be employed in a specialty occupation. Instead, USCIS 
must look to the duties that the beneficiary will perform, and the 
requirements of the end-client to which the beneficiary is being 
staffed, as relevant and determinative as to whether the beneficiary's 
position will be in a specialty occupation.
---------------------------------------------------------------------------

    \160\ See, e.g., In re 5037859, 2019 WL 6827396 (AAO Nov. 7, 
2019) (``The scenario in Defensor has repeatedly been recognized by 
Federal Courts as appropriate in determining which entity should 
provide the requirements of an H-1B position and the actual duties a 
beneficiary would perform.'') (citing Altimetrik Corp. v. USCIS, No. 
2:18-cv-11754, at *7 (E.D. Mich. Aug. 21, 2019); Valorem Consulting 
Grp. v. USCIS, No. 13-1209-CV-W-ODS, at *6 (W.D. Mo. Jan. 15, 2015); 
KPK Techs. v. Cuccinelli, No. 19-10342, at *10 (E.D. Mich. Sep. 16, 
2019); Altimetrik Corp. v. Cissna, No. 18-10116, at *11 (E.D. Mich. 
Dec. 17, 2018); and Sagarwala v. Cissna, No. CV 18-2860 (RC), 2019 
WL 3084309, at *9 (D.D.C. July 15, 2019)).
    \161\ See Defensor v. Meissner, 201 F.3d 384 (5th Cir. 2000).
---------------------------------------------------------------------------

    DHS notes that the November 13, 1995 memorandum referenced by the 
commenter, entitled ``Supporting Documentation for H-1B Petitions,'' 
was rescinded by the 2018 memorandum ``Contracts and Itineraries 
Requirements for H-1B Petitions Involving Third-Party Worksites.'' 
\162\ Although the 2018 memorandum was itself rescinded by the 
``Rescission of Policy Memoranda'' memorandum published on June 17, 
2020,\163\ that memorandum did not reinstate the 1995 memoranda.
---------------------------------------------------------------------------

    \162\ USCIS, Policy Memorandum PM-602-0157, Contracts and 
Itineraries Requirements for H-1B Petitions Involving Third-Party 
Worksites (Feb. 22, 2018), https://www.uscis.gov/sites/default/files/document/memos/2018-02-22-PM-602-0157-Contracts-and-Itineraries-Requirements-for-H-1B.pdf.
    \163\ USCIS, Policy Memorandum PM-602-0114, Recission of Policy 
Memoranda (June 17, 2020), https://www.uscis.gov/sites/default/files/document/memos/PM-602-0114_ITServeMemo.pdf.
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    Comment: A trade association stated that the provision would create 
confusion among adjudicators and would prompt extensive and burdensome 
RFEs and NOIDs, increasing inefficiency and unnecessary expense for 
employers and USCIS. The commenter said that the level of discretion 
left to adjudicators in determining whether an H-1B worker has been 
staffed or is merely a service provider creates a high risk that the 
third-party placement provision would be applied to placements that do 
not involve staff augmentation, causing employment bottlenecks for U.S. 
companies and leaving work unfulfilled. The commenter said that third-
party companies rely on H-1B workers to perform high-skilled 
information technology services that their existing workforces cannot 
provide. The commenter said that the high cost and risk created by the 
proposal ignores business realities and fails to account for the 
difficulty petitioners would have in obtaining cooperation from end-
clients who have little to no experience with the H-1B process, and 
adding that the new end-client validation requirements are inconsistent 
with the principles of H-1B sponsorship which requires the petitioner 
to makes attestations of the specialty occupation role under penalty of 
perjury, not the end client. The commenter stated that the LCA along 
with the information and documentation provided by the petitioning 
employer should be sufficient.
    Response: DHS disagrees that this provision will cause confusion 
among adjudicators, resulting in unnecessary RFEs and the 
misapplication of this provision. Adjudicators are accustomed to 
reviewing the duties of a proposed position in conjunction with the 
nature of the petitioning entity's business practices, including 
additional information relating to any relevant third parties. This 
provision is not a change, but rather codifies longstanding practice 
with respect to determining eligibility in cases involving third-party 
placement.
    DHS also disagrees that this provision is ``inconsistent with the 
principles of H-1B sponsorship.'' It has always been

[[Page 103152]]

the petitioner's burden to establish eligibility for the benefit 
sought. As the commenter states, ``it is the petitioning employer that 
makes attestations of the specialty occupation role under penalty of 
perjury.'' Therefore, it is not evident how a petitioner can attest to 
or certify that a position will be a specialty occupation or comply 
with DOL labor condition application requirements if the beneficiary 
will essentially become part of another entity's organization and that 
third party entity is unwilling or unable to provide specific 
information about the minimum requirements for the position that the 
beneficiary will be staffed to fill. Moreover, most petitioners should 
be able to provide evidence of the third party's requirements for the 
beneficiary's position through documents that are generated in the 
normal course of the relationship (e.g., a master services agreement or 
statement of work) or are reasonably obtainable from the third party 
(e.g., a letter from the end client).
    Comment: An individual commenter said that the third-party 
placement provision represents a ``major change'' in the way that USCIS 
deals with third-party placements and that the provision is singling 
out staffing companies. The commenter stated that the provision for 
staffing companies to prove job requirements would place the staffing 
company in an impossible position if the end customer is unwilling to 
provide the necessary information. The commenter also noted that there 
may be difficulty in obtaining necessary documents where there are 
second and third level staffing companies in between the petitioner and 
the end customer. The commenter added that end customers may ``want no 
involvement'' with attesting to the requirements for the positions, 
stating that these end customers have concerns over joint employment 
liability. The commenter also expressed concerns with respect to 
petitioners providing fraudulent documentation when documentation from 
a third party cannot be obtained.
    Response: DHS disagrees that this provision will prevent staffing 
companies from establishing eligibility for H-1B specialty occupation 
workers. Further, if the petitioner seeks to staff the beneficiary to a 
third party but is unable to demonstrate the type of work the 
beneficiary will perform for the third party, it is unclear how the 
petitioner would be able to establish eligibility for the H-1B 
petition. Again, it remains the petitioner's burden to establish 
eligibility for the benefit sought. Petitioners should be able to 
provide evidence of the third party's requirements for the 
beneficiary's position through documents that are generated in the 
normal course of the relationship (e.g., a master services agreement or 
statement of work) or are reasonably obtainable from the third party 
(e.g., a letter from the client). Further, DHS clarifies that this rule 
does not address joint employment liability and this is not relevant to 
USCIS's determination for H-1B specialty occupation employment. It is 
also unclear how providing evidence documenting the work to be 
performed and the requirements for the position would impact joint 
employment liability in other contexts any more so than the nature of 
the contracted work itself.
    Comment: A trade association said that its members employ H-1B 
transfers and places them with end clients to complete project teams--
referred to as ``staff augmentation''--where multiple IT/engineering 
professionals, including H-1B workers, are placed with a client to 
complete a time sensitive, complex project. The commenter said that DHS 
is attempting to create a distinction where there is often no 
difference in the nature of the work being performed and added that 
there is no reason why U.S.-based IT staffing firms should be subject 
to different requirements than firms employing a different business 
model. The commenter said that the fundamental and only question should 
be whether the petitioner is performing work that satisfies the 
specialty occupation requirement. Similarly, a couple of individual 
commenters and a company stated that the proposed provision ignores the 
petitioning companies' long-term term need for particular skill sets 
and focuses exclusively on the end client's requirements for a short-
term project when determining if a position is in a specialty 
occupation. A law firm said that the provision would be fundamentally 
incompatible with the IT consulting industry's business model, and that 
DHS's failure to acknowledge that the rule would upend the IT services 
industry and upset related reliance interests is arbitrary and 
capricious. The commenter said that the provision would have negative 
policy consequences for American businesses, inconsistent with the 
goals of fueling innovation in technology industries spaces and 
maintaining a globally premier workforce.
    Response: DHS disagrees with the commenters' allegations that it is 
attempting to create a distinction where there is often no difference 
in the nature of the work being performed. There is a distinction 
between a beneficiary who merely provides services to a third party, 
and a beneficiary who fills a position within a third party's 
organizational hierarchy. In the former scenario, the petitioner may be 
better positioned to know the actual degree requirements for the 
beneficiary's work, whereas in the latter scenario, the third party may 
be better positioned than the petitioner to be knowledgeable of the 
actual degree requirements for the beneficiary's work. Thus, in the 
latter scenario, it is reasonable for USCIS to consider the 
requirements of the third party as determinative of whether the 
position is a specialty occupation.
    DHS also disagrees with the comments that this provision would be 
fundamentally incompatible with the IT consulting industry's business 
model. While IT staffing firms may have to provide additional evidence 
in some cases, they are still subject to the same fundamental 
requirement of demonstrating that the beneficiary will perform work in 
a specialty occupation. See INA sec. 101(a)(15)(H)(i), 8 U.S.C. 
1101(a)(15)(H)(i). It is exactly for this reason why DHS is codifying 
the third-party provision to clarify the circumstances when USCIS will 
consider a third party's requirements. The third-party provision is 
intended to ensure that petitioners are not circumventing specialty 
occupation requirements by imposing token requirements that are not 
relevant or applicable to the proffered position. This provision will 
help preserve the intent and purpose of the H-1B statute and 
regulations, which is to limit H-1B visas to positions that require 
specialized education, or its equivalent, to perform the duties, and 
theoretical and practical application of a body of highly specialized 
knowledge.
    DHS reiterates that the third-party provision does not eliminate 
the use of IT staffing companies in the H-1B program. As noted above, 
consistent with current practice, USCIS will review documentation in 
the petition to determine if there are indications that a beneficiary 
is filling an otherwise permanent position at the third-party rather 
than simply providing services or work on a discrete project for that 
third party. In USCIS's experience, it is rare that a beneficiary is 
staffed to the third party rather than providing services for them. If 
the beneficiary is staffed to a third party the petitioner would need 
to provide evidence of the third party's requirements for the 
beneficiary's position through documents that are generated in the 
normal course of the relationship (e.g., a master services agreement or 
statement of work) or are reasonably obtainable from the third

[[Page 103153]]

party (e.g., a letter from the client). Further, since this provision 
is consistent with longstanding USCIS practice, DHS does not believe 
there is a related reliance interest involved.
    Comment: A trade association and a law firm said that USCIS' 
``reliance'' in the NPRM on Defensor is ``misplaced.'' According to the 
commenters, the Defensor court treated the client as a co-employer, 
whereas the H-1B regulations contemplate only the petitioner as the 
employer. The commenters said that as Defensor involved a staffing 
agency for nurses that contracted H-1B nurses to hospitals, there is a 
``critical distinction'' between the nurses in Defensor and a software 
engineer providing services to the client rather than being staffed to 
the client. Similarly, a legal services provider said that Defensor 
involved an H-1B petitioner whose purported education requirement 
exceeded what was normal for the occupation in the industry at that 
time and exceeded what the third-party normally required, which the 
commenter said should be distinguished from a position where the 
employer's requirement is consistent with the normal requirements for 
the occupation. The commenter expressed concern that in all cases 
involving end-clients, USCIS will request evidence that the client 
normally requires a bachelor's degree, regardless of the position or 
the type of third-party relationship. The commenter said that Defensor 
is well-settled case law, and that proposed provision is unnecessary 
and likely to lead to more RFEs and thus more work for USCIS.
    Response: DHS disagrees that USCIS' reliance in the NPRM on 
Defensor is misplaced. Defensor is settled case law and establishes 
guidelines regarding the educational requirements that are most 
relevant in assessing whether a position is a specialty occupation in a 
petition involving a third-party placement. The third-party provision 
is intended to codify and clarify the Defensor analysis so that it is 
clear such analysis will only apply in situations where the beneficiary 
will be contracted to fill a position in a third party's organization. 
Contrary to the commenter's claim, this provision will not apply to 
every petition involving an end-client and the agency will not always 
request evidence of the end client's requirements. This provision is 
intended to codify existing USCIS practice and DHS does not anticipate 
that it will increase RFEs. Consistent with current practice, USCIS 
will make the determination as to whether the beneficiary will be 
``staffed'' to a third party on a case-by-case basis, taking into 
consideration the totality of the relevant circumstances.
    DHS acknowledges that the fact pattern in Defensor may be 
distinguishable from many other third-party placement scenarios, 
including those discussed above by the commenters. Nevertheless, 
reliance on Defensor is appropriate because this case illustrates the 
relevance of third-party requirements for the beneficiary's position, 
in addition to the petitioner's stated requirements, in assessing 
whether the proffered position qualifies as a specialty occupation. The 
court explained that, if only the petitioner's requirements are 
considered, any beneficiary with a bachelor's degree could be brought 
to the United States in H-1B status to perform non-specialty occupation 
work, as long as that person's employment was arranged through an 
employment agency that required all staffed workers to have bachelor's 
degrees. Defensor, 201 F. 3d at 388.
    Comment: A few commenters stated that the Defensor court's analysis 
that ``it was not an abuse of discretion to interpret the statute and 
regulations so as to require [the staffing agency] to adduce evidence 
that the entities actually employing the nurses' services required the 
nurses to have degrees, which [the staffing agency] could not do'' 
depended on its view that the hospital was a common-law ``employer'' 
under the regulations, which the commenters said was removed in the 
proposed rule. The commenters said that, unlike the adjudicators who 
have been relying on Defensor for more than two decades, the case 
offers no guidance on how USCIS should decide whether a consulting firm 
is ``staffing'' H-1B workers to third parties versus ``providing their 
services,'' which the commenters said is an entirely different question 
from the existence of an employment relationship under common law. The 
individual commenter cited legal commentators who have ``rightfully'' 
asked whether USCIS would ``understand the distinction between the 
nurse in Defensor,'' who filled an identical role as the hospital's own 
nursing staff, ``and a software engineer providing services to the 
client rather than being staffed at the client.''
    Response: DHS disagrees that the proposed rule includes a new 
standard without adequate explanation. The requirement that the 
beneficiary is coming to work in a specialty occupation has been and 
continues to be the main consideration when making H-1B specialty 
occupation determinations. DHS looks to Defensor as relevant in certain 
circumstances where a beneficiary will be staffed to a third party. In 
Defensor, the court found that the evidence of the client companies' 
job requirements is critical if the work is performed for entities 
other than the petitioner. However, simply being placed at a third 
party does not always make that third party's requirements 
determinative. DHS has provided examples in its NPRM and in this rule 
to help differentiate when a third party's requirements would be more 
relevant than the petitioner's.
    Comment: A few individual commenters requested that USCIS grant H-
1B visas only to direct employers and not staffing companies. 
Similarly, another individual commenter recommended that there not be 
any third-party placement allowed at all under the H-1B program. 
Another individual commenter requested that third-party employers be 
required to do paperwork similar to an LCA or an H-1B petition for 
accountability purposes.
    Response: DHS declines to adopt the suggestion to prohibit staffing 
companies and employees placed at third party worksites from utilizing 
the H-1B program, or to subject third party employers to additional 
paperwork similar to an LCA. DHS is finalizing changes to improve the 
integrity of the H-1B program, applicable to staffing companies and 
other H-1B petitioners, such as codifying DHS's authority to conduct 
site visits and clarifying that refusal to comply with site visits may 
result in denial or revocation of the petition, codifying its authority 
to request contracts, requiring that the petitioner establish that it 
has a bona fide position in a specialty occupation available for the 
beneficiary as of the requested start date, ensuring that the LCA 
properly supports and corresponds with the petition, and revising the 
definition of ``United States employer'' and adding a requirement that 
the petitioner have a legal presence and be amenable to service of 
process in the United States. These changes combined address the 
integrity and fraud concerns raised by the commenters, and will help 
maintain accountability and insight into employer practices, 
specifically with respect to the H-1B program, by providing additional 
measures to identify noncompliance and detect and deter fraud within 
the H-1B program.
    Comment: Several commenters urged DHS to remove the third-party 
placement provision, indicating that in most circumstances, the 
petitioning employer's requirements will govern H-1B adjudications. A 
couple of trade associations and a joint submission recommended that 
USCIS solicit further feedback from stakeholders on provisions relating 
to third-party

[[Page 103154]]

placement. The trade associations added that the provision, as written, 
would undermine other provisions in the proposed rule that seek to 
reduce government and private-sector burdens and bring clarity to the 
H-1B process. The trade associations added that the lack of clarity 
regarding the rules for adjudication for third-party employers would 
leave USCIS susceptible to legal challenges under the Administrative 
Procedure Act, incurring additional costs for the government and 
uncertainty for the public.
    Response: DHS disagrees that the third-party provision undermines 
other provisions in this rule or elsewhere, or that the provision will 
interfere with reducing burdens for the government and private sector. 
Further, DHS declines to remove the third-party placement provisions or 
solicit further feedback on it. As explained in responses to other 
comments, this provision is generally consistent with long-standing 
USCIS practice and codifies current case law. In codifying this 
practice and providing numerous examples both in the NPRM and in the 
responses to comments above, DHS aims to provide additional clarity on 
this provision.
    Comment: A law firm recommended that the adjective ``educational'' 
should precede the word ``requirements'' in the sentence within the 
proposed rule, requesting that DHS clarify that it is the third party's 
requirements, not the petitioning employer's requirements, that are 
most relevant if the beneficiary will be staffed to a third party. The 
commenter said that the third-party's educational requirements for the 
position is reliable, while the third party's experience and skill set 
requirements are ``notoriously'' unreliable. The commenter stated that 
it is a common practice for recruiters to describe the ideal or dream 
candidate while rarely describing their employers' actual experience 
and skill set requirements for the position.
    Response: DHS declines to adopt the commenter's suggestion to add 
the word ``education'' before the word ``requirements'' in the 
regulatory text. The word ``requirements'' is intended to include 
requirements in addition to education, which may include experience or 
training relevant to the proffered position, and may be relevant in 
assessing eligibility, including whether the proffered position 
qualifies as a specialty occupation.
    Comment: A law institute cited third-party placements of H-1B 
workers as a ``common feature'' in H-1B fraud, defeating the purpose of 
H-1B program as a means to provide labor when U.S. workers are not 
available. The commenter stated that as long as DHS permits third-party 
placement of H-1B workers, DHS is not serious about reducing abuse in 
the H-1B program. Similarly, a union requested that staffing companies 
be barred from the H-1B program.
    Response: As stated in the NPRM, the third-party placement 
provisions are consistent with longstanding USCIS practice and are 
intended to clarify that, where a beneficiary is staffed to a third 
party, USCIS will look to that third party's requirements for the 
position, rather than the petitioner's stated requirements, in 
assessing whether the proffered position qualifies as a specialty 
occupation. 88 FR 72870, 72908 (Oct. 23, 2023). This will help ensure 
that petitioners do not circumvent specialty occupation requirements by 
imposing token requirements or requirements that are not normal to the 
third party. DHS did not propose to eliminate third-party placement 
arrangements, and notes that such placements are permissible under the 
INA.\164\ As explained throughout this rule, DHS is finalizing a number 
of provisions intended to enhance the integrity of the H-1B program 
including by (1) codifying its authority to request contracts; (2) 
requiring that the petitioner establish that it has a bona fide 
position in a specialty occupation available for the beneficiary as of 
the requested start date; (3) ensuring that the LCA supports and 
properly corresponds with the petition; (4) revising the definition of 
``United States employer'' by codifying the existing requirement that 
the petitioner has a bona fide job offer for the beneficiary to work 
within the United States as of the requested start date and adding 
requirements of legal presence and amenability to service of process in 
the United States. Therefore, DHS declines to make changes in response 
to these comments.
---------------------------------------------------------------------------

    \164\ See, e.g., INA sec. 212(n)(1)(F), 8 U.S.C. 1182(n)(1)(F) 
(prescribing certain requirements and obligations pertaining to non-
displacement when an H-1B worker will be performing duties at the 
worksite of another employer).
---------------------------------------------------------------------------

15. Other Comments on Program Integrity and Alternatives
    Comment: Several commenters generally discussed concerns related to 
misuse of the H-1B program and emphasized the need to uphold the 
integrity of the program. For example, a professional association noted 
unemployment rates for recent college graduates, and stated that the 
proposed rule revisions ``do not set enforcement consequences should 
the [] business cut corners to hire foreigners instead of Americans.'' 
The commenter further stated that DHS ``should focus on employing 
unemployed and underemployed Americans before employing non-citizens.'' 
A union stated that DHS should unambiguously state that it is illegal 
to replace a U.S. worker with an H-1B guestworker under any 
circumstances, whether directly or through secondary displacement.
    Response: DHS appreciates the commenters' concerns about preserving 
the integrity of the H-1B program. With respect to the comments about 
recruiting or hiring U.S. workers before utilizing H-1B workers, DHS 
notes that the INA does not require a traditional labor market test for 
the H-1B program, and therefore, there is no specific requirement for a 
U.S. employer to first recruit U.S. workers before opting to hire H-1B 
workers instead of U.S. workers. Instead, Congress required U.S. 
employers seeking to utilize the H-1B program to obtain a certified 
LCA, attesting that the employment of H-1B workers will not adversely 
affect the wages and working conditions of similarly employed U.S. 
workers. Further, Congress specifically subjected certain petitioners 
(H-1B dependent employers and willful violators) to additional 
attestations, including that they did not and will not displace a U.S. 
worker and that they have taken good faith steps to recruit U.S. 
workers in the United States before filing the LCA.\165\
---------------------------------------------------------------------------

    \165\ See INA sec. 212(n)(1)(E), (G), 8 U.S.C. 1182(n)(1)(E), 
(G). These attestation requirements apply only to H-1B dependent 
employers, as defined at INA section 212(n)(3), 8 U.S.C. 1182(n)(3). 
H-1B dependent employers are not subject to these additional 
requirements, however, if the only H-1B nonimmigrant workers sought 
in the LCA receive at least $60,000 in annual wages or have attained 
a master's or higher degree in a specialty related to the relevant 
employment. See INA sec. 212(n)(1)(E)(ii) and (n)(3)(B), 8 U.S.C. 
1182(n)(1)(E)(ii) and (n)(3)(B).
---------------------------------------------------------------------------

    Comment: A joint submission recommended that USCIS clarify the 
requirement that the H-1B petition be non-frivolous. The commenters 
elaborated that ``non-frivolous'' should be defined consistently with 
the tolling provision of INA sec. 212(a)(9)(B)(iv) for foreign 
nationals who do not accrue unlawful presence after their Form I-94 
expires if there is a timely filed, non-frivolous extension or change 
of status pending, or for H-1B portability when a non-frivolous H-1B 
change of employer petition is filed under INA sec. 214(n).
    Response: The term ``non-frivolous'' is well-understood and 
currently exists within multiple regulations. See 8 CFR 
214.2(h)(2)(i)(H)(1)(ii). DHS notes that

[[Page 103155]]

the term ``frivolous,'' means that there is no arguable basis in law 
and fact, and believes this term is generally understood and 
sufficiently clear.\166\ Therefore, DHS declines to separately define 
``non-frivolous'' in this rule. USCIS will continue to review each 
filing on its own merits, on a case-by-case basis, according to the 
facts presented.
---------------------------------------------------------------------------

    \166\ According to Black's Law Dictionary, ``frivolous'' means 
lacking a legal basis or legal merit; manifestly insufficient as a 
matter of law.
---------------------------------------------------------------------------

G. Request for Preliminary Public Input Related to Future Actions/
Proposals

16. Use or Lose
    Comment: An advocacy group recommended that beneficiaries be 
permitted a minimum 6-month timeframe after being issued an H-1B visa 
to enter the United States and begin working in accordance with the 
terms of such visa, with a provision for exceptions in compelling 
situations (e.g. family illness/death). Additionally, the commenter 
recommended providing students with 1 year due to the uncertainty 
surrounding finishing coursework and research. The commenter also 
recommended 6 months for local petitioners. A couple of companies urged 
DHS to structure any use or lose system such that unused H-1B numbers 
can be reassigned.
    A few commenters, including associations and companies, recommended 
continued engagement with stakeholders to determine the best way to 
ensure that the limited number of H-1B cap-subject visas are used for 
bona fide job opportunities, adding that there are several legitimate 
reasons why there may be a delay in the beneficiary commencing 
employment. Several commenters stated that DHS fails to acknowledge 
some legitimate reasons for delays, including individuals who are 
already in the United States under another nonimmigrant visa category 
who may choose to delay commencing their H-1B employment. Another 
commenter recommended providing petitioning employers with the option 
to notify DHS that the employee is currently working under a different 
status and will eventually switch to H-1B.
    A company and a joint submission said that the frequency of 
``speculative employment'' is likely not as pervasive as expressed in 
the NPRM, and therefore, the solutions suggested by DHS are not 
required. For example, a couple of companies said that focusing on 
consular processing data may have been misplaced, as the majority of H-
1B cap petitions do not request consular processing.
    A trade association noted that while the data in Table 9 of the 
NPRM, which shows data on H-1B cap-subject petitions that selected 
consular processing into the United States, may be correct, DHS failed 
to acknowledge the causal relationship between government action/
inaction and the percentage of employees who had entered the United 
States within 6 months of the validity date. For example, according to 
the commenter, average processing times for H-1B petitions in 2017 were 
over one year, guaranteeing that employees would not be available for 
the beginning of the validity period. The commenter stated that this 
problem was exacerbated by staffing decreases at USCIS in 2017 and 
COVID-19. The commenter noted that Table 10 of the NPRM, which shows 
data on H-1B beneficiaries who went through consular processing, who 
arrived more than 90 days after their DOS visa validity start date, 
also failed to acknowledge impacts of COVID-19.
    A joint submission expressed opposition to the use or lose 
provision. The commenters said that the proposed beneficiary-based 
registration system is ``a less burdensome and more effective measure 
to increase H-1B cap usage,'' negating the need for a use or lose 
provision. Additionally, the commenters stated that post-approval use 
or lose mechanisms would be overbroad, burdensome, and would not deter 
bad actors.
    A research organization inquired why DHS proposed having employers 
report by a set deadline when DHS already possesses this information, 
as demonstrated in Tables 9 and 10, which show data on H-1B cap-subject 
petitions that selected consular processing into the United States and 
data on H-1B beneficiaries who went through consular processing, who 
arrived more than 90 days after their DOS visa validity start date, 
respectively. The commenter suggested that DHS should systematically 
check which petitions are associated with workers who have not entered 
the country after 90 days or 6 months. Additionally, the commenter 
reasoned that without punitive action beyond revocation of such 
petitions, the use or lose provision would not deter fraud. The 
commenter suggested that DHS review public documents from Federal 
lawsuits where visa-ready and travel-ready strategies were discussed by 
executives, and then audit firms with large numbers of H-1B workers who 
have not come to the United States, as well as firms with H-1B workers 
who have left the United Stated and not returned in over 30 days. 
Finally, the commenter stated that the proposed solution would require 
employers to self-report such fraud.
    Response: In the NPRM, DHS stated that it wants to ensure that the 
limited number of H-1B cap-subject visas and new H-1B grants that are 
statutorily available each fiscal year are used for non-speculative job 
opportunities. 88 FR 72870, 72909 (Oct. 23, 2023). DHS further stated 
that it is looking for the most effective ways to prevent petitions for 
speculative H-1B employment from being approved, and to curtail the 
practice of delaying H-1B cap-subject beneficiary's employment in the 
United States until a bona fide job opportunity materializes. DHS is 
not making any final regulatory changes as a result of the request for 
comments in the NPRM, but will take into consideration the input 
provided by commenters as it continues to research and consider the 
feasibility, benefits, and costs of various options to achieve its 
stated goals.
17. Beneficiary Notification
    Comment: A trade association requested clarification on the 
agency's policy goals regarding beneficiary notification. The 
association expressed an interest in discussing potential solutions 
that would balance the government's objectives without placing an undue 
burden and risk on petitioners.
    Response: As explained in the NPRM, DHS is exploring ways to 
provide H-1B and other Form I-129 beneficiaries with notice of USCIS 
actions taken on petitions filed on their behalf, including receipt 
notices for a petition to extend, amend, or change status filed on 
their behalf. 88 FR 72870, 72913 (Oct. 23, 2023). Enabling Form I-129 
beneficiaries to verify their own immigration status could improve 
worker mobility and protections. DHS is not making any final regulatory 
changes as a result of the request for preliminary input in the NPRM, 
but will take into consideration the input provided by commenters as it 
continues to research and consider the feasibility, benefits, and costs 
of various options to achieve its stated goals.
    Comment: A few commenters expressed support for the proposal to 
notify beneficiaries of USCIS actions taken on petitions filed on their 
behalf. One of these commenters expressed appreciation for the proposal 
and stated that it did not anticipate any substantial additional costs 
associated with the proposed change, as most large employers provide H-
1B employees with USCIS notices as part of standard

[[Page 103156]]

procedure. A company highlighted the importance of allowing the option 
of electronic notification and considering a petitioner's reasonable 
attempts to contact a former employee as reasonable compliance with the 
regulations. A trade association urged DHS to change the regulations to 
afford beneficiaries the chance to respond to any allegation that could 
affect their status. An advocacy group remarked that beneficiaries who 
are located in the United States must rely on petitioners to provide 
them with their Form I-94 Arrival-Departure Record, while beneficiaries 
who are outside of the United States receive this information or 
documentation directly. As such, the commenter recommended that the 
Department communicate with both the beneficiary as well as petitioner. 
A legal services provider suggested that USCIS should use its premium 
processing electronic notification system to provide receipt notices 
and approval notices by email to petitioners, beneficiaries, and 
attorneys. The commenter also stated that the use of an email system 
would save the agency administrative time, costs, and other expenses by 
eliminating the need to mail physical copies of documents to parties.
    A few commenters cited the Office of the Citizenship and 
Immigration Services Ombudsman (CIS Ombudsman) recommendation in 
response to USCIS' request for preliminary public input on ways to 
provide beneficiaries with notice of USCIS actions taken on petitions 
filed on their behalf. A union cited the Ombudsman recommendation and 
urged DHS to implement it, stating that all information pertaining to 
an employee's visa process should be accessible and available in real-
time to each employee. The commenter reasoned that only providing such 
information to the employer leaves employees vulnerable to 
exploitation. A research organization expressed their support for 
notifications to be sent to H-1B and other nonimmigrant workers and 
stated that there was ample time and opportunity to include a provision 
in the final rule to address this issue. The organization suggested 
that notifications could be sent directly to beneficiaries through text 
and via WhatsApp, making information more accessible to workers. A 
group of Federal elected officials agreed that petitioners should 
provide notices to beneficiaries and also encouraged DHS to include a 
provision requiring beneficiary notification in the final rule. The 
commenters cited the CIS Ombudsman recommendation and further reasoned 
that there would be no significant cost or burden since the agency 
already sends notification to the petitioning employer.
    A joint submission said that DHS's policy suggestion appears to be 
in response to the CIS Ombudsman recommendation and expressed support 
that beneficiaries receive direct notification. Thus, the commenters 
suggested the following:
     USCIS modify its online portal, akin to the U.S. CBP 
online system for obtaining Form I-94, allowing beneficiaries to access 
their status information directly;
     Interested beneficiaries create a MyUSCIS account to which 
USCIS could upload documentary information accessible to the 
beneficiary;
     USCIS send a copy of the notice to the beneficiary at the 
address listed in the Form I-129; and
     USCIS email notification to the beneficiary's email 
address listed in the Form I-129.
    Response: In the NPRM, DHS stated that it was seeking preliminary 
public input on ways to provide H-1B and other Form I-129 beneficiaries 
with notice of USCIS actions taken on petitions filed on their behalf 
as well as other suggestions regarding ways to ensure adequate 
notification to beneficiaries of actions taken with respect to 
petitions filed on their behalf. 88 FR 72870, 72913 (Oct. 23, 2023). As 
indicated in the NPRM, the feedback was sought to inform potential 
future action, and DHS did not propose a particular approach in the 
NPRM. Therefore, DHS is not making any regulatory changes as a result 
of the request for preliminary input in this final rule but will take 
into consideration the input provided by these commenters as it 
continues to research and consider the feasibility, benefits, and costs 
of various options separate and apart from this final rule.

H. Other Comments on the Proposed Rule

    Comment: Some commenters, including joint submissions, a trade 
association, professional associations, a research association, and a 
company, cited research on labor shortages of STEM professionals, 
projected growth, and additional labor needs as general support for the 
need to modernize the H-1B program. The commenters stated that foreign 
STEM talent is necessary for the U.S. economy and current immigration 
policies negatively impact the ability to attract and retain talent. A 
trade association said that immigration policies must enable firms to 
hire global talent when the number of U.S. engineering graduates does 
not meet demand.
    Response: DHS shares the commenters concern with ensuring that 
immigration policies support the United States and U.S. employers in 
attracting and retaining foreign STEM talent and filling labor needs 
across all industries.
    Comment: Some commenters included remarks regarding the 
exploitation of noncitizen and U.S. workers through the H-1B program. 
An advocacy group and a research organization remarked that H-1B visa 
holders are not necessarily working in highly technical fields and 
stated that they tend to hold ``ordinary skills'' that are abundantly 
available in the U.S. labor market. Additionally, the commenters 
expressed that companies are exploiting the program by paying foreign 
workers below market levels, which in turn drives down wages of 
American workers.
    Response: The H-1B 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 at least a bachelor's or 
higher degree in the specific specialty, or its equivalent. See INA 
secs. 101(a)(15)(H)(i)(b) and 214(i), 8 U.S.C. 1101(a)(15)(H)(i)(b) and 
1184(i). Therefore, DHS disagrees with the commenters' assertion that 
H-1B nonimmigrants tend to work in fields that are not highly technical 
or hold ``ordinary skills.''
    With respect to wages, per DOL regulations at 20 CFR 655.731, an 
employer seeking to employ an H-1B worker in a specialty occupation 
must attest on the LCA that it will pay the H-1B worker the higher of 
either the prevailing wage for the occupational classification in the 
geographic area of intended employment or the actual wage paid by the 
employer to individuals with similar experience and qualifications for 
the specific employment in question. H-1B petitions for a specialty 
occupation worker must include a certified LCA from DOL, and failure to 
comply with DOL LCA requirements may impact eligibility.
    Comment: A research organization said that there are several 
structural and programmatic flaws with the H-1B program. For example, 
the organization said that employers are not required to recruit U.S. 
workers before hiring H-1B workers. Additionally, the commenter said 
that employers can legally underpay H-1B workers and that there is 
evidence that DOL is failing to enforce the requirement to pay H-1B 
workers the ``actual wage'' they pay U.S.

[[Page 103157]]

workers. The same commenter also expressed that H-1B workers are 
exploited and lack job mobility to leave these underpaying jobs, due to 
recruitment fees and the inability to self-petition for an H-1B visa. 
Finally, the commenter stated that outsourcing companies use the H-1B 
program to offshore jobs, replace U.S. workers with underpaid H-1B 
workers, and ultimately degrade the labor standards for skilled 
workers. A union made similar statements, citing several sources. The 
commenter urged DHS to pursue ``bolder structural changes'' to the H-1B 
program instead of ``tinkering at the edges'' of the program.
    Response: DHS acknowledges the general concerns that some 
unscrupulous employers abuse the H-1B visa program. To prevent fraud 
and abuse and strengthen H-1B program integrity, DHS is finalizing this 
rule, which: (1) codifies DHS's authority to request contracts; (2) 
requires that an H-1B petitioner establish that it has a bona fide 
position in a specialty occupation available for the beneficiary as of 
the requested start date; (3) ensures that the LCA supports and 
properly corresponds with the petition; (4) revises the definition of 
``United States employer'' by codifying the existing requirement that 
the petitioner has a bona fide job offer for the beneficiary to work 
within the United States as of the requested start date, consistent 
with current DHS policy, and adds a requirement that the petitioner 
have a legal presence and be amenable to service of process in the 
United States; (5) clarifies that beneficiary-owners may be eligible 
for H-1B status, while setting reasonable conditions for when the 
beneficiary owns a controlling interest in the petitioning entity; (6) 
codifies USCIS' authority to conduct site visits; (7) clarifies that 
refusal to comply with site visits may result in denial or revocation 
of the petition; and (8) clarifies that, if an H-1B worker will be 
staffed to a third party, meaning they will be contracted to fill a 
position in the third party's organization, it is the requirements of 
that third party, and not the petitioner, that are most relevant when 
determining whether the position is a specialty occupation. DHS 
disagrees with the suggestion that these changes are not significant. 
These changes strike an appropriate balance between improving program 
integrity without being unduly onerous to H-1B employers.
    DHS also recognizes the commenters' concerns regarding what they 
perceive as structural flaws in the H-1B program. However, DHS is 
unable to make the types of structural changes to fundamentally change 
the H-1B program the commenters suggested. For example, as noted above 
in this preamble, the statute generally does not require a labor market 
test for the H-1B program, and therefore, there is no general statutory 
requirement for an H-1B petitioner to first recruit U.S. workers before 
opting to hire H-1B workers instead of U.S. workers.
    Comment: Some individual commenters stated that DHS needs to 
address current backlogs before moving forward with additional 
applications. A different individual commenter said that many H-1B 
employees are on these temporary visas due to backlogs, not by personal 
choice. A trade association encouraged USCIS to continue to explore 
actions that would reduce backlog and costs, such as reinstituting the 
``Known Employer'' Initiative. An advocacy group expressed concern that 
changes, such as redefining ``specialty occupation,'' increasing 
requirements for third-party employers, and expanding the authority of 
investigators to conduct site visits could increase backlogs.
    Response: DHS is committed to reducing backlogs for all immigration 
benefit requests. However, it is unclear to which backlogs the 
commenters referred. H-1B petitions have historically been adjudicated 
within a median processing time of 0.2 to 4.7 months depending on 
whether they were filed with a premium processing request.\167\
---------------------------------------------------------------------------

    \167\ DHS, USCIS, Historical National Median Processing Time (in 
Months) for All USCIS Offices for Select Forms By Fiscal Year 2019 
to 2024 (up to Feb. 28, 2024), https://egov.uscis.gov/processing-times/historic-pt (last visited Apr. 8, 2024) (showing that the 2024 
median processing time for premium-processed H-1B petitions was 0.2 
months, and for non-premium-processed H-1B petitions was 2.6 
months).
---------------------------------------------------------------------------

    In terms of the Known Employer (KE) pilot, USCIS made the decision 
to end the KE pilot in 2020, based on a combination of operational, 
technical, and regulatory issues.\168\ The lengthy process of clearing 
KE predeterminations, combined with no discernible time savings for 
USCIS during the adjudication of petitions using the KE process, meant 
that time savings were negligible. While reducing the paperwork burden 
for the agency and petitioners was one of the goals, such a reduction 
was not observed in any meaningful way because of the low participation 
rate from most participants. Developing a permanent KE program of 
similar design would divert resources away from current technology 
development priorities, add complexity to operations by creating 
additional petition ingestion processes, create differing adjudication 
processes, require additional personnel, and require the creation of 
additional electronic systems that would need to be maintained.
---------------------------------------------------------------------------

    \168\ DHS, USCIS, Trusted Employer Program Fiscal Year 2022 
Report to Congress (Aug. 11, 2022), https://www.dhs.gov/sites/default/files/2022-09/USCIS%20-%20Trusted%20Employer%20Program.pdf.
---------------------------------------------------------------------------

    DHS further declines to make changes to this final rule owing to 
concerns that strengthening the integrity of the H-1B program may cause 
adjudication delays that increase backlogs. While DHS aims to eliminate 
backlogs and improve program efficiency, DHS must also balance the need 
to address fraud and abuse in the H-1B program.
    Comment: An advocacy group said that the final rule should address 
USCIS' legal opinion issued after the enactment of Public Law 114-113. 
The commenter recommended that the fee for H-1B petitions should be 
extended to all employers. According to the commenter, the increased 
revenue would fund the entry/exit system, per the statute. Another 
commenter suggested additional fees for premium processing. A different 
commenter said that increasing fees or higher taxes on companies with a 
substantial H-1B workforce could be a deterrent to using the program. A 
company said that H-1B fees have gone towards programs that support 
growth of the domestic technology workforce. The commenter recommended 
continued funding for these programs by USCIS and encouraged DOL to 
reopen the ``H-1B One Workforce'' and the ``Apprenticeships: Closing 
the Skills Gap'' grant programs, or open similar grant programs.
    Response: DHS declines to adopt the commenters' suggestions 
concerning fees and funding, as such suggestions are beyond the scope 
of this rulemaking. DHS notes that it also issued an NPRM on June 6, 
2024, proposing changes to the regulations and applicability of the 
Public Law 114-113 fee to better ensure that the entry/exit system is 
fully funded.\169\
---------------------------------------------------------------------------

    \169\ See ``9-11 Response and Biometric Entry-Exit Fee for H-1B 
and L-1 Visas,'' 89 FR 48339 (June 6, 2024).
---------------------------------------------------------------------------

    Comment: A law firm said that they look forward to USCIS issuing 
guidance and training to ensure adoption of these provisions. An 
advocacy group urged quick implementation of the updated provisions 
related to the registration process, deference, and clarified 
eligibility for entrepreneurs and cap-exempt organizations. Similarly, 
some individual commenters urged quick

[[Page 103158]]

implementation of the proposed rule. A trade association recommended 
further clarification regarding the effective date of the rule as it 
relates to the impact of the upcoming H-1B cap season and the then-
proposed increases in fees. The association emphasized the need for 
USCIS to coordinate the implementation of these two rules, carefully 
considering their combined impact on petitioners and beneficiaries.
    Response: DHS appreciates the commenters' concerns about the timely 
implementation of this final rule. As with all final rules, DHS will 
ensure that adjudicators receive any necessary guidance and training in 
a timely manner to properly adjudicate the forms that this final rule 
will affect. This final rule will be effective January 17, 2025, and 
will apply to petitions filed on or after that date. DHS published a 
final rule to make changes to the registration process, including 
beneficiary-centric selection, on February 2, 2024 (89 FR 7456), and 
those changes went into effect for the registration period for the FY 
2025 cap season.
    Comment: A joint submission cited research and ``urged Congress to 
find common ground on high-skilled immigration and border reform and 
reduce critical STEM talent gaps by recapturing unused visas, creating 
a startup visa for entrepreneurs, exempting advanced graduates in STEM 
fields from green card caps, and eliminating outdated and arbitrary 
per-country caps on green cards that no longer track to economic 
need.'' A couple of individual commenters urged USCIS to lobby Congress 
for further enhancements to professional immigration policy. A couple 
of individual commenters urged USCIS to lobby Congress for further 
enhancements to professional immigration policy.
    Response: DHS will not make responsive changes to this final rule 
to address these suggestions, as such suggestions are beyond the scope 
of this rulemaking. DHS will continue to support requests from Congress 
for technical assistance with legislative proposals.
    Comment: A professional association recommended maintaining or 
reducing the number of visas due to increased unemployment rates. The 
commenter reasoned that more Americans are qualified for the positions 
that employers need to fill, and prioritizing the hiring of Americans 
would decrease unemployment, homelessness, crime, and mental health 
issues.
    Response: DHS declines to adopt the commenter's suggestions 
concerning visa numbers, as such suggestions would require a 
legislative change and as such, are beyond the scope of this 
rulemaking.

I. Out of Scope

    DHS received many comments that were unrelated to the proposed 
revisions in the NPRM. Many of these comments would require 
congressional action or separate regulatory action by DHS. Other 
comments suggested revisions within the purview of DOL or other 
departments and agencies. Although DHS has summarized the comments it 
received below, DHS is not providing substantive responses to those 
comments as they are beyond the scope of this rulemaking. Comments from 
the public outside the scope of this rulemaking concerned the following 
issues:
    Numerous commenters discussed the immigrant visa process and 
backlog. These comments included the following:
     General concerns about the immigrant visa backlog for 
those adjusting status via an approved employment-based immigrant visa 
petition;
     Requests that USCIS provide an EAD and advance parole 
document to those with an approved Form I-140;
     Requests to remove the per-country cap on immigrant visas;
     Requests to not count dependents of principal immigrant 
visa beneficiaries when determining immigrant visa usage;
     Suggestions to clear the current immigrant visa backlogs.
     Requests to remove delays within the immigrant visa 
process;
     A comment that increasing cap exemptions without expanding 
immigrant visa numbers would exacerbate backlog issues and be unfair to 
H-1B workers currently waiting for an employment-based immigrant visa 
number to become available in the United States;
     Several commenters provided suggestions related to the 
statutory H-1B cap, such as:
     Requests to increase the H-1B cap or exempt certain groups 
of individuals, unrelated to the proposed revisions to cap exemptions 
(including requests to ``prioritize'' specific groups);
     Requests to eliminate the H-1B cap altogether;
     Requests to lower the H-1B cap.
     A request that additional cap exemptions be provided for 
H-1B positions in U.S. AI programs, citing articles detailing the 
importance of foreign born talent for AI innovation. An individual 
commenter generally stated that cap exemptions should be provided for 
graduates working in STEM fields or AI, as well as entrepreneurs. 
Similarly a company requested that DHS work with Congress to consider 
increasing the H-1B visa cap and exempt STEM fields from the H-1B cap.
    Several commenters suggested that USCIS bar or place a cap on 
prospective beneficiaries from certain countries, including:
     Implementing a country cap for H-1B;
     Banning certain countries from the H-1B program;
     Introducing a new visa classification for countries like 
India and China.
    Some commenters provided remarks related to DOL rulemakings and DOL 
authorities, including:
     Recommendations that the prevailing wage be adjusted;
     A suggestion that employers must file multiple LCAs for H-
1B employees who work a hybrid schedule involving work from home and 
on-site elements;
     A suggestion that DHS change its procedures to ensure that 
LCAs for an H-1B petition are submitted no earlier than 6 months before 
the start date of intended employment, thus ensuring consistency 
between H-1B application processes and LCA validity;
     A suggestion that DHS promulgate a new H-1B wage 
methodology rule through DOL.
    Several commenters provided remarks on dependents or derivatives of 
H-1B visa holders, such as:
     Comments and concerns related to H-4 visas;
     Recommendations to implement protections for dependents 
who age out of their immigration status and/or eligibility for an 
immigrant visa;
     Removing dual intent from H-1B visas.
    Several commenters discussed topics related to F-1 OPT and 
Curricular Practical Training (CPT) programs outside the scope of the 
rule, including:
     General comments related to the F-1 visa program;
     Requests to add additional oversight to or end the OPT 
system;
     A request that F-1 OPT interns/volunteers of 501(c)(3) 
organizations not be treated as ``employees,'' and allow them to be 
charged a fee/tuition;
     A request that USCIS promulgate regulations to extend H-1B 
cap gap benefits to F-1 students seeking to apply for the O-1B 
classification, reasoning that recent graduates pursuing arts careers 
would benefit from extended OPT;
     A request that USCIS extend the provision allowing OPT 
students who are in the cap-gap to travel before their

[[Page 103159]]

H-1B effective date, reasoning that they may also need to travel for 
personal or professional reasons prior to their H-1B status taking 
effect;
     Requests to give additional time for non-stem OPT 
individuals to find a sponsorship;
     A comment that extending the cap-gap for OPT students 
would help ``weed out'' the issue of Day 1 CPT schools; and
     A suggestion that USCIS work with labor agencies to ensure 
workers have adequate protection against retaliation when they exercise 
collective bargaining rights and that USCIS should take proactive 
measures to prevent threats by employers of nonimmigrant visa holders.
    Several Commenters discussed program integrity and made suggestions 
to improve it that were outside the scope of the rulemaking, including:
     Requests to improve immigration policy overall, including 
congressional immigration reform;
     Requests for companies to receive harsher punishments when 
they violate H-1B rules or other labor laws along with clarity on how 
they would be prosecuted;
     A request for transparency as to how companies are using 
the H-1B program, so that there can be public scrutiny as to which 
companies may be abusing it;
     A commenter recommended revisions to support the integrity 
of the program, including:
     Require petitioners to remain in good standing with 
Federal, State, and local laws;
     Prohibit part-time and concurrent employment for H-1B visa 
holders.
    Finally, numerous commenters offered remarks on other topics 
outside the scope of the proposed rule, including:
     Requests to make it mandatory for entities to provide 
evidence that they were unable to find qualified individuals in the 
United States for positions before using the H-1B program;
     Requests for domestic renewal of visas;
     Request to add additional grace period if an H-1B holder 
loses employment;
     Requests for investigations and more oversight of IT and 
consulting firms;
     Requests to allow H-1B employees to change employers;
     Requests for changes to the maximum period of stay in H-1B 
status and changes to the calculation of the maximum period of stay 
(eliminating recapture of time spent outside the U.S.);
     A comment that cap-exempt entities should be required to 
disclose any Federal spending that is related to the job listed in I-
129 filings or if the beneficiaries' work at a secondary employer is 
federally funded. The commenter added that cap-exempt positions should 
include strong worker protections to promote the public interest and 
allow for labor mobility of petitioners, require Level 3 or 4 wages, 
and prohibit outsourcing companies from placing H-1B beneficiaries at 
cap-exempt employers;
     Recommendations that DHS modernize H-1B licensure 
requirements, reasoning that the current regulations requiring H-1B 
licensing are impractical since licensing requirements vary by State 
and occupation;
     A suggestion for a three-phase modernization process, 
which would involve a five percent cap on non-U.S. citizens at any 
company while providing training to U.S. citizens; conducting an audit 
of H-1B employers whose employees were selected for a position over 
U.S. citizens, and if no suspicious activity was found, then H-1B 
holders could be permitted to apply for residency after 5 years;
     A request that DHS provide concrete status protections to 
noncitizen workers that report potential company abuse of the system, 
since workers often have the most knowledge and evidence of petitioner 
efforts to offer speculative employment;
     A suggestion that foreign labor recruiters should be 
prohibited from charging fees to workers;
     A request for clarification regarding ``when a beneficiary 
is considered counted towards the cap;''
     A few individual commenters recommended the following:
     Raise the minimum wage for H-1B workers to $150,000;
     Require employers to certify that there are not American 
workers available for the position;
     Require Employers to pay 10 to 15 percent of their total 
H-1B payroll expenses into a fund that would be used to train and 
educate American students;
     Prohibit H-1B dependent companies from requesting 
additional H-1B visas without hiring more Americans;
     Prohibit companies who reported layoffs from using H-1B 
for the next 2 years;
     Add a provision that would convert all contractors to full 
time after 90 days, similar to provisions implemented by the Illinois 
DOL;
     Emphasize that each F-1 student can only submit one H-1B 
application at a time.

J. Statutory and Regulatory Requirements

1. Administrative Procedure Act
    Comment: While expressing support for DHS's effort to improve the 
H-1B program, a few commenters including trade associations, an 
advocacy group, and an individual commenter urged the Department to 
incorporate the concerns, suggestions, and expertise of the regulated 
community, such as the higher education and legal industries. A 
research organization remarked that DHS should provide a public 
analysis of the program change impacts and their scale at the NPRM 
stage. The commenter noted that under the Administrative Procedure Act, 
the public should have the opportunity to understand and comment on the 
proposed change after reviewing a detailed analysis. A trade 
association expressed concern that USCIS has decreased engagement with 
regulated industry, and suggested that increasing engagement with 
industry would improve compliance and trust in the system. A business 
association similarly requested that USCIS host listening sessions with 
stakeholders and publish additional Federal Register notices.
    Response: DHS provided sufficient analysis of the impacts of the 
proposed rule in the NPRM published in the Federal Register on October 
23, 2023 (88 FR 72870), and provided a 60-day period for the public to 
provide comments on the proposed rule. In finalizing this rulemaking, 
DHS has considered all of the concerns and suggestions made in each 
comment and incorporated changes, where appropriate. DHS disagrees that 
USCIS has decreased engagement with the regulated public. Rather, USCIS 
regularly conducts public engagements on the national and local level 
on a variety of topics, including topics related to the H-1B program.
    Comment: A company expressed support for the decision to seek 
public input on the proposed rule. A couple of commenters remarked that 
the proposed changes should be subject to a ballot measure, in order to 
effectively engage U.S. citizens. A couple of commenters also expressed 
concern that many people may not be aware of the proposed rule or its 
comment period. An individual commenter expressed that only citizens 
should be involved in the public participation process. An individual 
commenter expressed concern that the purpose of the comment period is 
minimized if review and finalization of the rule takes several years.

[[Page 103160]]

    Response: This final rule complies with the Administrative 
Procedure Act. DHS provided notice to the public by issuing a proposed 
rule in the Federal Register on October 23, 2023 (88 FR 72870). USCIS 
also announced publication of the proposed rule on its website.\170\ 
DHS accepted public comments on the proposed rule through December 22, 
2023, a period of 60 days. Submission of comments was not limited to 
U.S. citizens, and DHS notes that there is no basis for such 
limitation. With respect to the commenter's concerns regarding the 
passage of time from the publication of the NPRM and the comment period 
to the issuance of the final rule, DHS notes that this rulemaking has 
proceeded on a fast schedule given the breadth and complexity of the 
issues covered; within a year from the closing of the comment period, 
DHS has issued two final rules addressing the proposals contained in 
the NPRM.\171\
---------------------------------------------------------------------------

    \170\ https://www.uscis.gov/newsroom/news-releases/dhs-issues-proposed-rule-to-modernize-the-h-1b-specialty-occupation-worker-program.
---------------------------------------------------------------------------

2. Comments on the Regulatory Impact Analysis (RIA) (E.O. 12866 and 
E.O. 13563)
    Comment: An individual commenter, expressing support for the 
proposed rule, said that while the proposed changes may lead to the 
costs outlined in the summary of costs and benefits, the long-term 
benefits to the H-1B program including robustness, fairness, and 
transparency would outweigh these costs.
    Response: DHS agrees that this rule will provide significant long-
term benefits to the H-1B program.
    Comment: An attorney remarked that by extending OPT, the proposed 
rule would have negative economic impacts such as deflecting employment 
opportunities from U.S. workers and suppression of wages. To support 
this, the commenter provided several statistics on employment in the 
United States from a Center for Immigration Studies report, a 2016 
National Academy of Sciences study, and an article from the Washington 
Examiner.
    Response: Regulatory impact analyses completed by USCIS regularly 
consider two competing scenarios in which employers are or are not 
assumed to be able to find reasonable labor substitutes such as U.S. 
workers to perform work. Treating each scenario as equally likely, 
USCIS would describe the impact of policies that result in increased 
labor supply as partly a transfer of wages from hypothetically willing 
and able U.S. workers--whether actively seeking employment or not--to 
the foreign workers, and partly a benefit to employers or consumers 
from foreign workers performing work that otherwise could not be 
completed without significant training and search costs. From these 
analyses, USCIS observes that replacement costs are significant, often 
prohibitively so for higher skilled and higher-wage positions.\172\ 
With regard to this rule's provision granting up to six additional 
months employment authorization to a foreign student who has already 
worked one or more years for an employer and who has already been 
approved for an H-1B visa, the commenter's baseline assumption that 
employers would hire other U.S. workers for this gap period between 
training and employment is unreasonable and not supported by the 
general discussion in the sources cited. USCIS sought public comment on 
estimates of the population expected to benefit from the expansion of 
cap-gap, but no commenters provided information on this or evidence of 
how students working between graduation and the start of H-1B work 
deflects employment opportunities for other reasonable labor 
substitutes.
---------------------------------------------------------------------------

    \172\ See 89 FR 24655.
---------------------------------------------------------------------------

    Comment: A few commenters including a joint submission of 
attorneys, a trade association, and a company commented that the NPRM's 
estimate of a 1.08-hour burden for site visits split evenly between the 
H-1B beneficiary and their supervisor is an underestimate, as other 
internal or third-party personnel such as human resources and legal are 
often involved. The commenters also stated that the statistics the NPRM 
presents relating to noncompliance and fraud are inaccurate, both 
because the NPRM does not provide raw data about the instances 
categorized as noncompliant or fraudulent, and because in some cases 
the NPRM conflates noncompliance with fraud.
    Response: The average 1.08-hour burden is based on a calculation 
from data provided by the USCIS Fraud Detection and National Security 
Directorate. See 88 FR 72870, 72945 (Oct. 23, 2023). DHS acknowledges 
that the duration of individual site visits varies. The commenter noted 
that, in addition to beneficiaries and their supervisors, various 
parties such as in-house and third-party counsel may spend time 
preparing for a site visit. While noting that the 5-year average burden 
increased to 1.09 hour when adding data for FY 2023, DHS declines to 
further increase the estimate of an average site visit. DHS notes that 
the Form I-129 burden captures the estimated time to gather, prepare, 
attach, and submit required documentation related to beneficiary's 
employment. The Form I-129 instructions also note that DHS may verify 
any information submitted to establish eligibility through methods 
including ``making unannounced physical site inspections of residences 
and locations of employment.'' While some petitioners may elect to have 
additional managers, legal counsel, or executives prepare for or 
participate in a site visit, DHS believes that the methodology in the 
NPRM reasonably estimates the additional resources for the site visit 
provision and declines to estimate the opportunity cost of time for 
these additional parties.
    Comment: An individual commenter expressed concern that the 
proposed rule would disproportionately impact small nonprofits, due to 
having fewer resources to comply with the new requirements. The 
commenter urged USCIS to mitigate impacts on small nonprofits.
    Response: DHS acknowledges that a high percentage of entities 
impacted by this rule are small but notes that the net impacts of the 
final rule result in cost savings.
    Comment: A company remarked that the 10-year net impact of the 
proposed rule is justified given that it would result in greater 
robustness and equity in the H-1B program. The company added that the 
benefits of the program include mitigating deterrents to working or 
studying in the United States, which would increase talent in student 
and employment pools, leading to advancements in research and 
technology.
    Response: DHS agrees with the commenter that the benefits of this 
rule justify the costs.

K. Severability

    All of the provisions of this rule are severable from each other 
such that if a court were to hold that any provision is invalid or 
unenforceable as to a particular person or circumstance, the rule would 
remain in effect as to any other person or circumstance. Specifically, 
DHS intends that the provisions which streamline requirements for the 
H-1B program such as revising the regulatory definition and criteria 
for a ``specialty occupation''; clarifying that ``normally'' does not 
mean ``always'' within the criteria for a specialty occupation; and 
clarifying that a position may accept a range of qualifying degree 
fields as sufficient to qualify for the position, although there must 
be a direct

[[Page 103161]]

relationship between the required field(s) and the duties of the 
position all be severable from one another and from all of the other 
provisions in this rule. In addition, DHS intends that the provision 
clarifying when an amended or new petition must be filed due to a 
change in an H-1B worker's place of employment, the provisions 
addressing USCIS' deference policy, the provision requiring that 
evidence of maintenance of status to be included with the petition if a 
beneficiary is seeking an extension or amendment of stay, and the 
provision eliminating the itinerary requirement, impacting all H 
classifications, as well as that allowing petitioners to amend 
requested validity periods where the requested validity expires before 
adjudication all be severable from one another. None of these 
provisions are dependent on one another and can function independently 
if any are invalidated. In the severability clause at new 8 CFR 
214.2(h)(33), DHS has identified the second level paragraphs (for 
example, paragraph (h)(2)) in which the severable amended provisions 
contained in this final rule can be found. These references along with 
the date of the final rule are intended to better identify the 
severable provisions and differentiate them from the existing 
provisions in 8 CFR 214.1 and 214.2 that are not being impacted by this 
final rule.

IV. Statutory and Regulatory Requirements

A. Executive Order 12866 (Regulatory Planning and Review) and Executive 
Order 13563 (Improving Regulation and Regulatory Review)

    Executive Orders (E.O.) 12866 (Regulatory Planning and Review), as 
amended by Executive Order 14094 (Modernizing Regulatory Review), and 
13563 (Improving Regulation and Regulatory Review) direct agencies to 
assess the costs and benefits of available regulatory alternatives and, 
if a regulation is necessary, to select regulatory approaches that 
maximize net benefits (including potential economic, environmental, 
public health and safety effects, distributive impacts, and equity). 
E.O. 13563 emphasizes the importance of quantifying both costs and 
benefits, of reducing costs, of harmonizing rules, and of promoting 
flexibility.
    The Office of Management and Budget (OMB) has designated this final 
rule a ``significant regulatory action'' as defined under section 3(f) 
of E.O. 12866, as amended by Executive Order 14094, but it is not 
significant under section 3(f)(1) because its annual effects on the 
economy do not exceed $200 million in any year of the analysis. 
Accordingly, OMB has reviewed this final rule.
1. Summary of Changes From NPRM to Final Rule
    As discussed in the preamble, the purpose of this rulemaking is to 
modernize and improve the regulations governing the H-1B program by: 
(1) streamlining the requirements of the H-1B program and improving 
program efficiency; (2) providing greater benefits and flexibilities 
for petitioners and beneficiaries; and (3) improving integrity 
measures.
    Following careful consideration of the public comments received, 
this final rule adopts the provisions proposed in the NPRM, with 
revisions as described above relating to Specialty Occupation 
Definition and Criteria, Bar on Multiple Registrations Submitted by 
Related Entities, Contracts, Bona fide employment, and Beneficiary-
Owners.
    DHS analyzed two baselines for this final rule, the no action 
baselines and the without-policy baseline. The primary baseline for 
this final rule is the no action baseline. For the 10-year period of 
analysis of the final rule DHS estimates the annualized net cost 
savings of this rulemaking will be $333,835 annualized at 2 percent. 
DHS also estimates that there will be annualized monetized transfers of 
$1.4 million from newly cap-exempt petitioners to USCIS and $38.8 
million from other employees to F-1 workers, both annualized at a 2 
percent discount rate. Table 1 provides a more detailed summary of the 
final rule provisions and their impacts.
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    In addition to the impacts summarized above, and as required by OMB 
Circular A-4, Table 2 presents the prepared accounting statement 
showing the costs and benefits that will result in this final 
rule.\173\
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    \173\ OMB, Circular A-4 (Sept. 17, 2003), https://www.whitehouse.gov/wp-content/uploads/legacy_drupal_files/omb/circulars/A4/a-4.pdf (last viewed June 1, 2021).
[GRAPHIC] [TIFF OMITTED] TR18DE24.041


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[GRAPHIC] [TIFF OMITTED] TR18DE24.042

BILLING CODE 9111-97-C
2. Background
    The purpose of this rulemaking is to modernize and improve the 
regulations relating to the H-1B program by: (1) streamlining the 
requirements of the H-1B program and improving program efficiency; (2) 
providing greater benefits and flexibilities for petitioners and 
beneficiaries; and (3) improving integrity measures. Some of the 
provisions will narrowly impact other nonimmigrant classifications.
3. Costs, Transfers, and Benefits of the Final Rule
viii. Specialty Occupation Definition and Criteria
    In response to commenters' concerns, DHS is modifying the 
definition of specialty occupation. After carefully considering the 
comments, DHS is not finalizing the proposed regulatory text of ``[t]he 
required specialized studies must be directly related to the 
position,'' as this language may be misread as stating that USCIS would 
only consider a beneficiary's specialized studies. The ``directly 
related'' requirement is, however, being retained in the definition of 
``specialty occupation'' and in the criteria.
    DHS is also adding regulatory text to clarify the level of 
connection needed to meet the ``directly related'' requirement by 
adding the sentence, ``directly related means that there is a logical 
connection between the degree, or its equivalent, and the duties of the 
position,'' to the regulatory text. Further, DHS is adding a reference 
to the ``duties of the position'' to the prior sentence about allowing 
a range of qualifying degree fields to assure stakeholders that this 
practice has not changed.
    To address commenters' various concerns about not relying on degree 
titles, DHS is removing the references to ``business administration'' 
and ``liberal arts.'' These changes recognize that title of the degree, 
alone, is not determinative and that titles may differ among schools 
and evolve over time.
    DHS is also making some minor, non-substantive revisions to 8 CFR 
214.2(h)(4)(iii)(A), which include: changing the word ``are'' to ``is'' 
in 8 CFR 214.2(h)(4)(iii)(A)(4); revising 8 CFR 214.2(h)(4)(iii)(A)(2) 
from ``United States industry'' to ``industry in the United States''; 
and revising 8 CFR 214.2(h)(4)(iii)(A)(2) and (3) by adding ``to 
perform the job duties for'' rather than just the word ``position''.

[[Page 103173]]

    Relative to the no-action baseline, this change has no costs 
associated with it, and there may be transparency benefits due to this 
change. Relative to the without-policy baseline petitioners may have 
taken time to provide position descriptions or other evidence of 
connection between a degree, or its equivalent, and the duties of the 
position.
ix. Amended Petitions
    DHS is clarifying when an amended or new H-1B petition must be 
filed due to a change in an H-1B worker's place of employment. 
Specifically, this rule will clarify that any change of work location 
that requires a new LCA is itself considered a material change and 
therefore requires the petitioning employer to file an amended or new 
petition with USCIS before the H-1B worker may perform work under the 
changed conditions.
    This change will clarify requirements for H-1B amended petitions by 
codifying Matter of Simeio Solutions, LLC \174\ and incorporating DOL 
rules on when a new LCA is not necessary. DHS estimates that this 
change will save petitioners filing amended petitions 5 minutes for 
each petition (0.08 hours).
---------------------------------------------------------------------------

    \174\ See USCIS, ``USCIS Final Guidance on When to File an 
Amended or New H-1B Petition After Matter of Simeio Solutions, 
LLC,'' PM-602-0120 (July 21, 2015), https://www.uscis.gov/sites/default/files/document/memos/2015-0721_Simeio_Solutions_Transition_Guidance_Memo_Format_7_21_15.pdf.
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    USCIS received a low of 64,385 amended petitions in FY 2019, and a 
high of 77,255 amended petitions in FY 2023. Based on the 5-year annual 
average, DHS estimates that 71,141 petitioners file for an amended 
petition each year shown in Table 3. DHS does not know if all of these 
amended petitions are due to a change in an H-1B worker's place of 
employment. Because of this, DHS cannot estimate how many of these new 
and amended petitions will benefit by consolidating existing 
requirements and providing clearer regulatory text pertaining to when a 
petitioner must submit an amended or new petition with or without a new 
LCA.
BILLING CODE 9111-97-P
[GRAPHIC] [TIFF OMITTED] TR18DE24.043

    DHS conducted a sensitivity analysis to estimate the number of 
petitions that may benefit from this change. Table 4 presents the lower 
and upper bound number of petitions filed annually for amended 
petitions and for new petitions, which corresponds to a range of 10 to 
90 percent.
[GRAPHIC] [TIFF OMITTED] TR18DE24.044

    Using the lower and upper bounds of the estimated annual population 
for the petitioners who will file amended petitions, DHS estimates the 
cost savings based on the opportunity cost of time of gathering and 
submitting information by multiplying the estimated time burden savings 
for those filing an amended petition (5 minutes or 0.08 hours) by the 
compensation rate of an HR specialist, in-house lawyer, or outsourced 
lawyer, respectively.
    In order to estimate the opportunity costs of time for completing 
and filing an H-1B amended petition DHS assumes that a petitioner will 
use an HR specialist, an in-house lawyer, or an outsourced lawyer to 
prepare an H-1B

[[Page 103174]]

amended petition.\175\ DHS uses the mean hourly wage of $36.57 for HR 
specialists to estimate the opportunity cost of the time for preparing 
and submitting the H-1B amended petition.\176\ Additionally, DHS uses 
the mean hourly wage of $84.84 for in-house lawyers to estimate the 
opportunity cost of the time for preparing and submitting the H-1B 
amended petition.\177\
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    \175\ USCIS limited its analysis to HR specialists, in-house 
lawyers, and outsourced lawyers to present estimated costs. However, 
USCIS understands that not all entities employ individuals with 
these occupations and, therefore, recognizes equivalent occupations 
may also prepare and file these amended petitions.
    \176\ See BLS, ``Occupational Employment and Wage Statistics, 
Occupational Employment and Wages, May 2022, 13-1071 Human Resources 
Specialists,'' https://www.bls.gov/oes/2023/may/oes131071.htm (last 
visited August 23, 2024).
    \177\ See BLS, ``Occupational Employment and Wage Statistics, 
Occupational Employment and Wages, May 2022, 23-1011 Lawyers,'' 
https://www.bls.gov/oes/2023/may/oes231011.htm (last visited August 
23, 2024).
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    DHS accounts for worker benefits when estimating the total costs of 
compensation by calculating a benefits-to-wage multiplier using the BLS 
report detailing the average employer costs for employee compensation 
for all civilian workers in major occupational groups and industries. 
DHS estimates that the benefits-to-wage multiplier is 1.45 and, 
therefore, is able to estimate the full opportunity cost per 
petitioner, including employee wages and salaries and the full cost of 
benefits such as paid leave, insurance, retirement, etc.\178\ DHS 
multiplied the average hourly U.S. wage rate for HR specialists and in-
house lawyers by 1.45 to account for the full cost of employee 
benefits, for a total of $53.03 \179\ per hour for an HR specialist and 
$123.02 \180\ per hour for an in-house lawyer. DHS recognizes that a 
firm may choose, but is not required, to outsource the preparation of 
these petitions and, therefore, presents two wage rates for lawyers. To 
determine the full opportunity costs of time if a firm hired an 
outsourced lawyer, DHS multiplied the average hourly U.S. wage rate for 
lawyers by 2.5 for a total of $212.10 to approximate an hourly cost for 
an outsourced lawyer to prepare and submit an H-1B amended petition or 
LCA.\181\
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    \178\ The benefits-to-wage multiplier is calculated as follows: 
(Total Employee Compensation per hour)/(Wages and Salaries per hour) 
($45.42 Total Employee Compensation per hour)/($31.29 Wages and 
Salaries per hour) = 1.45158 = 1.45 (rounded). See BLS, Economic 
News Release, ``Employer Costs for Employee Compensation--December 
2023,'' Table 1. ``Employer Costs for Employee Compensation by 
ownership [Dec. 2023],'' https://www.bls.gov/news.release/archives/ecec_03132024.htm (last visited Aug. 21, 2024). The Employer Costs 
for Employee Compensation measures the average cost to employers for 
wages and salaries and benefits per employee hour worked.
    \179\ Calculation: $36.57 * 1.45 = $53.03 total wage rate for HR 
specialist.
    \180\ Calculation: $84.84 * 1.45 = $123.02 total wage rate for 
in-house lawyer.
    \181\ Calculation: $84.84 * 2.5 = $212.10 total wage rate for an 
outsourced lawyer.
    The DHS analysis in ``Exercise of Time-Limited Authority to 
Increase the Fiscal Year 2018 Numerical Limitation for the H-2B 
Temporary Nonagricultural Worker Program,'' 83 FR 24905 (May 31, 
2018), https://www.federalregister.gov/documents/2018/05/31/2018-11732/exercise-of-time-limited-authority-to-increase-the-fiscal-year-2018-numerical-limitation-for-the, used a multiplier of 2.5 to 
convert in-house attorney wages to the cost of outsourced attorney 
wages.
    The DHS ICE rule ``Final Small Entity Impact Analysis: `Safe-
Harbor Procedures for Employers Who Receive a No-Match Letter' '' at 
G-4 (Aug. 25, 2008), https://www.regulations.gov/document/ICEB-2006-0004-0922, also uses a multiplier. The methodology used in the Final 
Small Entity Impact Analysis remains sound for using 2.5 as a 
multiplier for outsourced labor wages in this rule.
---------------------------------------------------------------------------

    DHS does not know the exact number of petitioners who will choose 
an in-house or an outsourced lawyer but assumes it may be a 50/50 split 
and therefore provides an average. Table 5 shows that the total annual 
cost savings will range from $77,111 to $694,006. DHS estimates the 
total cost savings to be the average between the lower bound and the 
upper bound estimates. Based on this, DHS estimates the average cost 
savings from this provision to be $385,559.

[[Page 103175]]

[GRAPHIC] [TIFF OMITTED] TR18DE24.045

x. Deference to Prior USCIS Determinations of Eligibility in Requests 
for Extensions of Petition Validity
    DHS is codifying and clarifying its existing deference policy at 
amended 8 CFR 214.1(c)(5). Deference has helped promote consistency and 
efficiency for both USCIS and its stakeholders. The deference policy 
instructs officers to consider prior determinations involving the same 
parties and facts, when there is no material error with the prior 
determination, no material change in circumstances or in eligibility, 
and no new material information adversely impacting the petitioner's, 
applicant's, or beneficiary's eligibility. This provision is codifying 
the deference policy \182\ dated April 27, 2021. Relative to the no-
action baseline there are no costs to the public. The benefit of 
codifying this policy is that there may be some transparency benefits 
to having the policy in the CFR. Relative to a without-policy baseline 
petitioners may need to take time to familiarize themselves with those 
changes made in the 2021 deference policy memo. The provision applies 
to all nonimmigrant classifications for which form I-129 is filed to 
request an extension of stay (i.e., E-1, E-2, E-3, H-1B, H-1B1, H-2A, 
H-2B, H-3, L-1, O-1, O-2, P-1, P-1S, P-2, P-2S, P-3, P-3S, Q-1, R-1, 
and TN nonimmigrant classifications). The deference policy had been in 
effect since 2004 but was rescinded in 2017 until 2021, when it was 
reinstated in the USCIS Policy Manual. After USCIS rescinded deference 
in 2017, the number of RFEs and denials increased.
---------------------------------------------------------------------------

    \182\ See USCIS, ``Deference to Prior Determinations of 
Eligibility in Requests for Extensions of Petition Validity, Policy 
Alert,'' PA-2021-05 (April 27, 2021), https://www.uscis.gov/sites/default/files/document/policy-manual-updates/20210427-Deference.pdf 
(last visited on Mar. 23, 2023).
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    Table 6 shows the number for Form I-129 RFEs filed for an extension 
of stay or amendment of stay, that are requesting a continuation of 
previously approved employment or a change in previously approved 
employment from FY 2019 through FY 2023. USCIS received a low of 8,381 
RFEs for Form I-129 classifications in FY 2023, and a high of 43,435 
RFEs for Form I-129 classifications in FY 2020. Based on a 5-year 
annual average, 26,192 petitioners who filed for an extension of stay 
or amendment of stay are requesting a continuation of previously 
approved employment or a change in previously approved employment 
receive an RFE for Form I-129 per year.

[[Page 103176]]

[GRAPHIC] [TIFF OMITTED] TR18DE24.046

    DHS will codify the deference policy that applies to the 
adjudication of a petition. Relative to a without-policy baseline, this 
change could affect the number of RFEs that USCIS sends for Form I-129. 
USCIS estimates that there may be a reduction in RFEs, as officers 
adjudicating a Form I-129 involving the same parties and the same 
underlying facts will typically be able to defer to a prior approval, 
given there is no new material information or a material error. The 
reduction in RFEs may save time and make the overall process faster for 
petitioners and USCIS.
    Table 7 shows the number of Form I-129 receipts, submitted 
concurrently with a Form G-28, filed for a continuation of previously 
approved employment or a change in previously approved employment, and 
requesting an extension of stay or amendment of stay, on which USCIS 
issued an RFE. Based on the 5-year annual average, DHS estimates that 
20,049 petitioners who received an RFE filed with a Form G-28 and 6,142 
petitioners who received an RFE filed without a Form G-28.
[GRAPHIC] [TIFF OMITTED] TR18DE24.047

    DHS conducted a sensitivity analysis to estimate the number of 
petitions that may benefit from codifying and clarifying its existing 
deference policy. Table 8 presents the lower and upper bound number of 
petitions filed annually for amended petitions and for new petitions, 
which corresponds to a range of 10 to 90 percent.

[[Page 103177]]

[GRAPHIC] [TIFF OMITTED] TR18DE24.048

    Using the lower and upper bounds of the estimated annual population 
for the petitioners who may no longer have to provide duplicative data, 
DHS estimates the cost savings based on the opportunity cost of time of 
gathering and submitting duplicative information by multiplying the 
estimated time burden to gather information 10 minutes (0.167 hours) by 
the compensation rate of an HR specialist, in-house lawyer, or 
outsourced lawyer, respectively. DHS does not know the exact number of 
petitioners who will choose an in-house or an outsourced lawyer but 
assumes it may be a 50/50 split and therefore provides an average. 
Table 9 shows that the total annual cost savings due to the codifying 
and clarifying its existing deference policy will range from $61,772 to 
$555,900. DHS estimates the total cost savings to be the average 
between the lower bound and the upper bound estimates. Based on this 
DHS estimates the average cost savings from this provision to be 
$308,836.
[GRAPHIC] [TIFF OMITTED] TR18DE24.049

xi. Evidence of Maintenance of Status
    DHS is clarifying current requirements and codifying practices 
concerning evidence of maintenance of status at 8 CFR 214.1(c)(1) 
through (7). Primarily, DHS seeks to clarify that evidence of 
maintenance of status is required for petitions where there is a 
request to extend or amend the beneficiary's stay.
    This change will list examples of additional evidence types that 
petitioners may provide but will not limit petitioners to those 
specific evidence types. The form instructions further state that if 
the beneficiary is employed in the United States, the petitioner may 
submit copies of the beneficiary's last two pay stubs, Form W-2, and 
other relevant evidence, as well as a copy of the beneficiary's Form I-
94, passport, travel document, or Form I-797. This change may decrease 
the number of RFEs and NOIDs by clearly stating what types of 
supporting documentation are relevant and clarifying that petitioners 
should submit such supporting documentation upfront, rather than 
waiting for USCIS to issue a request for additional information.

[[Page 103178]]

This may benefit petitioners by saving them the time to review and 
respond to RFEs and NOIDs.
    DHS is codifying into regulation the instructions that, when 
seeking an extension or amendment of stay, the applicant or petitioner 
must submit supporting evidence to establish that the applicant or 
beneficiary maintained the previously accorded nonimmigrant status 
before the extension or amendment request was filed. Additionally, DHS 
will remove the sentence: ``Supporting evidence is not required unless 
requested by the director.'' See amended 8 CFR 214.2(h)(14). See also 
amended 8 CFR 214.2(l)(14)(i) (removing ``Except in those petitions 
involving new offices, supporting documentation is not required, unless 
requested by the director.''); amended 8 CFR 214.2(o)(11) and amended 8 
CFR 214.2(p)(13) (removing ``Supporting documents are not required 
unless requested by the director.''). DHS expects that these changes 
will reduce confusion for applicants and petitioners, clarify what 
evidence is required for all extension or amendment of stay requests, 
and simplify adjudications by decreasing the need for RFEs and NOIDs.
    Based on the 5-year annual average, DHS estimates that 292,324 Form 
I-129 petitions are filed requesting an extension of stay. Of those 
total filed petitions, DHS estimates that 48,064 petitioners who 
requested an extension of stay received an RFE and the remaining 
244,260 did not receive and RFE as shown in Table 10.
[GRAPHIC] [TIFF OMITTED] TR18DE24.050

    DHS estimates that 26,344 petitions are filed requesting to amend 
the stay. Of those, DHS estimates that 5,802 petitions that are filed 
requesting to amend the stay receive an RFE and 20,542 do not receive 
an RFE.
[GRAPHIC] [TIFF OMITTED] TR18DE24.051

    DHS estimates that 84,164 petitions are filed requesting to change 
status and extend the stay. Of those, DHS estimates that 22,867 
petitions that are filed requesting to change status and extend the 
stay receive an RFE and 61,298 do not receive an RFE.

[[Page 103179]]

[GRAPHIC] [TIFF OMITTED] TR18DE24.052

    It is important to note that issuing RFEs and NOIDs takes time and 
effort for adjudicators--to send, receive, and adjudicate 
documentation--and it requires additional time and effort for 
applicants or petitioners to respond, resulting in extended timelines 
for adjudications.\183\ Data on RFEs and NOIDs related to maintenance 
of status are not standardized or tracked in a consistent way, limiting 
USCIS's ability to accurately or reliably observe the relationship 
between specific circumstances and RFEs; however, the data demonstrate 
that these requests and notices continue to occur at nontrivial rates.
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    \183\ The regulations state that when an RFE is served by mail, 
the response is timely filed if it is received no more than 3 days 
after the deadline, providing a total of 87 days for a response to 
be submitted if USCIS provides the maximum period of 84 days under 
the regulations. The maximum response time for a NOID is 30 days. 
See USCIS Policy Manual, Vol. 1, ``General Policies and 
Procedures,'' Part E, ``Adjudications,'' Chap. 6, ``Evidence,'' 
https://www.uscis.gov/policy-manual/volume-1-part-e-chapter-6.
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    DHS anticipates that USCIS adjudicators may issue fewer RFEs and 
NOIDs related to maintenance of status under this rule due to clarity 
of what types of supporting documentation are relevant and 
clarification that petitioners and applicants should submit such 
supporting documentation upfront, rather than waiting for USCIS to 
issue a request for additional information, which will reduce the 
burden on applicants, petitioners, and adjudicators, and save time 
processing applications and petitions.
xii. Eliminating the Itinerary Requirement for H Programs
    DHS will eliminate the H programs' itinerary requirement. See 
amended 8 CFR 214.2(h)(2)(i)(B) and (F). Current 8 CFR 
214.2(h)(2)(i)(B) states that ``A petition that requires services to be 
performed or training to be received in more than one location must 
include an itinerary with the dates and locations of the services or 
training and must be filed with USCIS as provided in the form 
instructions.'' In addition, current 8 CFR 214.2(h)(2)(i)(F) contains 
additional language requiring an itinerary for H petitions filed by 
agents as the petitioner.
    DHS recognizes this change may affect H-1B petitioners filing for 
beneficiaries performing services in more than one location and 
submitting itineraries.\184\ However, due to the absence of detailed 
data on petitioners submitting itineraries, DHS estimates the affected 
population as the estimated number of petitions filed annually for 
workers placed at off-site locations. DHS assumes the petitions filed 
for workers placed at off-site locations are likely to indicate that 
beneficiaries may be performing services at multiple locations and, 
therefore, petitioners are likely to submit itineraries. Eliminating 
the itinerary requirement will reduce petitioner burden and promote 
more efficient adjudications, without compromising program integrity. 
This change may benefit petitioners who have beneficiaries at 
alternative worksites.
---------------------------------------------------------------------------

    \184\ USCIS does not currently apply the itinerary requirement 
to H-1Bs working at multiple locations. See 88 FR 72870, 72882.
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    Table 13 shows the total number of Form I-129 H-1B Receipts with 
and without Form G-28, FY 2019 through FY 2023. USCIS received a low of 
386,598 Form I-129 H-1B Receipts in FY 2023, and a high of 474,311 Form 
I-129 H-1B Receipts in FY 2022. Based on the 5-year annual average, DHS 
estimates that there are 421,421 Form I-129 H-1B petitioners each year.

[[Page 103180]]

[GRAPHIC] [TIFF OMITTED] TR18DE24.053

    Table 14 shows the average number of Form I-129 H-1B petitions 
approved in FYs 2019 through 2023 for workers placed at off-site 
locations. Approximately 27 percent of approved petitions were for 
workers placed at off-site locations. DHS uses the estimated 27 percent 
as the proportion of both the population of received petitions and the 
population of approved petitions that are for workers placed at off-
site locations.
[GRAPHIC] [TIFF OMITTED] TR18DE24.054

    DHS conducted a sensitivity analysis to estimate the number of H-1B 
petitions filed annually for workers placed at off-site locations that 
may contain itineraries (113,784).\185\ Table 15 presents the lower and 
upper bound number of petitions filed annually for workers placed at 
off-site locations who may submit itineraries, which corresponds to a 
range of 10 to 90 percent.
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    \185\ DHS uses the proportion of petitions approved for off-site 
workers (27 percent from Table 14) as an approximate measure to 
estimate the number of petitions received annually for off-site 
workers from the total number of petitions filed. 113,784 petitions 
filed requesting off-site workers = 421,421 petitions filed annually 
x 27 percent.

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[[Page 103181]]

[GRAPHIC] [TIFF OMITTED] TR18DE24.055

    Using the lower and upper bounds of the estimated annual population 
for H-1B petitioners who may no longer be required to gather and submit 
itinerary information, DHS estimates the cost savings based on the 
opportunity cost of time of gathering and submitting itinerary 
information by multiplying the estimated time burden to gather 
itinerary information (0.08 hours) by the compensation rate of an HR 
specialist, in-house lawyer, or outsourced lawyer, respectively. Table 
16 shows that the total annual cost savings due to the itinerary 
exemption will range from $130,631 to $1,175,692. Since the itinerary 
information normally is submitted with the Form I-129 H-1B package, 
there will be no additional postage cost savings. DHS estimates the 
total cost savings to be the average between the lower bound and the 
upper bound estimates. Based on this DHS estimates the average cost 
savings from this provision to be $653,162.

[[Page 103182]]

[GRAPHIC] [TIFF OMITTED] TR18DE24.056

BILLING CODE 9111-97-C
    DHS acknowledges the elimination of the itinerary requirement may 
also affect H petitions filed by agents as well as H-2 petitions filed 
for beneficiaries performing work in more than one location or for 
multiple employers, however, DHS has not estimated these cost savings 
here.
xiii. Validity Period Expires Before Adjudication
    DHS will allow H-1B petitions to be approved or have their 
requested validity period dates extended if USCIS adjudicates and deems 
the petition approvable after the initially requested validity period 
end-date, or the period for which eligibility has been established, has 
passed. This typically will happen if USCIS deemed the petition 
approvable upon a favorable motion to reopen, motion to reconsider, or 
appeal.
    If USCIS adjudicates an H-1B petition and deems it approvable after 
the initially requested validity period end-date, or the last day for 
which eligibility has been established, USCIS may issue an RFE asking 
whether the petitioner wants to update the dates of intended 
employment. This change may increase the number of RFE's; however, it 
may save petitioners from having to file another H-1B petition and 
USCIS from having to intake and adjudicate another petition.
    If in response to the RFE the petitioner confirms that it wants to 
update the dates of intended employment and submits a different LCA 
that corresponds to the new requested validity dates, even if that LCA 
was certified after the date the H-1B petition was filed, and assuming 
all other eligibility criteria are met, USCIS will approve the H-1B 
petition for the new requested period or the period for which 
eligibility has been established, as appropriate, rather than require 
the petitioner to file a new or amended petition. Under a no-action 
baseline, the requirement to file an amended or new petition results in 
additional filing costs and burden for the petitioner. DHS expects that 
this change will save

[[Page 103183]]

petitioners the difference between the opportunity cost of time and the 
fee to file an additional form, and the nominal opportunity cost of 
time and expense associated with responding to the RFE. This change 
will benefit beneficiaries selected under the cap, who will retain cap-
subject petitions while their petition validity dates are extended or 
whose petitions now may be approved rather than denied based on this 
technicality.
xiv. H-1B Cap Exemptions
    DHS is revising the requirements to qualify for H-1B cap exemption 
when a beneficiary is not directly employed by a qualifying 
institution, organization, or entity at 8 CFR 214.2(h)(8)(iii)(F)(4). 
These final changes intend to clarify, simplify, and modernize 
eligibility for cap-exempt H-1B employment, so that they are less 
restrictive and better reflect modern employment relationships. The 
changes also intend to provide additional flexibility to petitioners to 
better implement Congress's intent to exempt from the annual H-1B cap 
certain H-1B beneficiaries who are employed at a qualifying 
institution, organization, or entity.
    DHS is revising 8 CFR 214.2(h)(19)(iii)(C), which states that a 
nonprofit research organization is an entity that is ``primarily 
engaged in basic research and/or applied research,'' and a governmental 
research organization is a Federal, State, or local entity ``whose 
primary mission is the performance or promotion of basic research and/
or applied research.'' DHS is replacing ``primarily engaged'' and 
``primary mission'' with ``a fundamental activity'' in order to permit 
a nonprofit entity or governmental organization that conducts research 
as a fundamental activity but is not primarily engaged in research to 
meet the definition of a nonprofit research entity or a governmental 
research organization. This will likely increase the population of 
petitioners who are now eligible for the cap exemption and, by 
extension, will likely increase the number of petitions that may be 
cap-exempt.
    Petitioners who qualify for a cap exemption for their employees 
under the final rule will no longer have to register for the cap 
lottery or pay the $215 registration fee. Some affected petitioners may 
avoid ACWIA fees that would have been applicable to their initial cap-
subject petitions. While DHS does not have administrative data to 
estimate precisely how many additional petitioners will now qualify for 
these cap exemptions, the RIA presented estimates that the modest 
expansion in I-129 petitions and approved beneficiaries results from 
cap-subject registrants, many of whom would not have been randomly 
selected in the lottery, become eligible to petition directly for cap-
exempt researchers.
    Aside from the reduction in transfers from not having to pay the 
registration fee, petitioners that qualify under the cap exemptions 
will also benefit from not having to wait for H-1B cap season to 
commence employment. This may allow approved petitioners to have their 
H-1B workers commence employment earlier, prior to the beginning of the 
fiscal year on October 1.
    The National Science Foundation's (NSF) Nonprofit Research 
Activities (NPRA) Survey of nonfarm businesses filing IRS tax form 990 
as tax-exempt organizations with payroll of $500,00 or more, estimated 
there were 2,835 nonprofits with research and development (R&D) 
activity accounting for $27B in FY2021 R&D expenditures.\186\ This 
equals $9.6M R&D expenditures per nonprofit with R&D activity in 
2021.\187\ The largest share of nonprofits' R&D expenditures were made 
possible by Federal Government funds (43%), followed by other sources 
of funds (30%) and internal funds (28%). While data on the specific 
activities of individual research nonprofits is not available to DHS or 
the public, NSF NPRA Tables 1, 2, and 3 show that R&D as a share of a 
research nonprofits' expenditures vary widely. For example, while 
comparable amounts were spent on research activities by nonprofits in 
the science and technology (S&T) sector and the healthcare sector ($21M 
and $22M, respectively), these expenditures comprise 53% of a typical 
S&T nonprofit's expenditures, but only 2% of a typical healthcare 
nonprofit's total expenditures.\188\ Other research nonprofits outside 
the S&T or healthcare sectors spent less on research activities ($1M or 
5% of total expenditures), but outnumbered both S&T and healthcare 
sectors combined (1,660 ``other nonprofit organizations'' compared to 
514 S&T and 658 healthcare nonprofits with R&D activity). NPRA Tables 8 
through 11 show similar results for research employees as a share of 
total employees (R&D employees comprise 55,527 FTE or 68% of the 81,241 
employees of S&T organizations with R&D activity, compared with 2% for 
healthcare organizations with R&D activity and 8% of other nonprofit 
organizations with R&D activities. NPRA Table 11 provides additional 
detail on the mix of researchers, technicians and other support 
personnel employed to support nonprofits' research activities.
---------------------------------------------------------------------------

    \186\ See NSF NPRA Data Table 1 at https://ncses.nsf.gov/surveys/nonprofit-research-activities/2021#data. Last accessed 8/6/
2024.
    \187\ $27.19B All R&D expenditures (NPRA Table 3) divided by 
2,835 organizations with R&D activity (NPRA Table 1) = $9.6M 
(rounded).
    \188\ USCIS analysis. Dividing All R&D expenditures in NPRA 
Table 3 by total expenses of Science and technology nonprofit 
organizations in NPRA Table 2 = 53% (rounded) R&D expenditures as a 
share of a research nonprofits' expenses. This approach yields 2% 
for Healthcare and 5% for Other nonprofit organizations.
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    Given the highly competitive nature of the market for research 
funding, DHS assumes R&D funding is unlikely to be awarded to 
nonprofits that do not already employ the highly skilled, highly 
specialized staff required to successfully carry out research 
requirements.\189\ Consequently, any impacts to nonprofits that do not 
already employ skilled/specialized labor would be constrained by the 
difficulty of competing for research funding before petitioning for 
qualified researchers or petitioning for qualified researchers before 
competing for research funding. A national immigration law-firm with 
significant experience provided comments agreeing a more significant 
difference in the number of petitions that fit the parameters of cap 
exempt eligibility is unlikely.
---------------------------------------------------------------------------

    \189\ NIH RePORT Research Project Grants: Competing 
Applications, Awards and Success Rates at https://report.nih.gov/nihdatabook/report/20 (last accessed 8/6/2024). NIH Data Book shows 
a 19% success rate defined as the number of grants awarded divided 
by the number of applications received. Similarly, see National 
Science Board Report at https://www.nsf.gov/nsb/news/news_summ.jsp?cntn_id=307818 (last access 8/6/24) reporting an 
FY2021 funding rate of 26%.
---------------------------------------------------------------------------

    Furthermore, NSF's NPRA Table 7 shows $0.32 for every $1 of FY2021 
nonprofit organizations' research expenditures flowing out in the form 
of grants, subcontracts or subawards to support R&D by other 
organizations. While neither DHS nor NSF know the degree to which 
research activities' employment is structured around interpretations of 
DHS's requirement of employment at the cap-exempt entity, NPRA Table 7 
depicts a highly interconnected research enterprise in which research 
activities flow between other organizations with research 
activities.\190\ A practical impact of the definition change could be 
additional flexibility for research organizations and

[[Page 103184]]

foreign researchers when determining the appropriate employer. For this 
reason, these changes are assumed to represent a shift from currently 
cap-exempt organizations to newly exempt organizations rather than a 
true expansion in the population of cap-exempt visas. DHS agrees, 
however, with information submitted by a commenter representing 
postdocs and research organizations that the change ``diversif[ies] 
international postdocs' available career paths'' and therefore could 
result in an expansion if cap-exempt H-1B workers' research careers 
gradually extend more broadly throughout the research enterprise as a 
result of this flexibility.
---------------------------------------------------------------------------

    \190\ Funds provided by ``Other nonprofit organizations'' to 
others for R&D ($5.5B in FY2021 from NPRA Table 7) exceeds Total R&D 
Expenditures by other nonprofit organizations ($2.4B in NPRA Table 
6) because providing R&D funding to another organization does not 
count as an R&D expenditure. Consequently, DHS describes this as 
$2.28 in research funding to other organizations per $1 of research 
expenditures rather than 228% of expenditures.
---------------------------------------------------------------------------

    In the NPRM, the RIA estimated these modest impacts would accrue to 
cap subject registrants seeking highly skilled, highly specialized 
research staff.\191\ DHS's assessment that a larger response is 
unlikely is supported by several factors. Cap subject petitioners have 
always had the option to access cap-exempt researchers by creating 
separate research nonprofits or partnerships with cap-exempt 
universities and research organizations. DHS's high-end estimate, 2,845 
additional cap exempt visas, is just higher than the NSF estimated 
number of nonprofits with R&D activity in FY2021.
---------------------------------------------------------------------------

    \191\ See 88 FR 72934.
---------------------------------------------------------------------------

    Commenters provided no information nor substantive critique of the 
NPRM RIA's estimated impact, incorrectly alleged no rationale for the 
proposed changes, and contradicted the NSF NPRA data in asserting, 
without evidence, that ``all nonprofits do some activity they could 
labeled as or considered to be research [sic]'' and, therefore the 
change would ``bust the statutory cap wide open.'' In the absence of 
information, DHS includes the monetized impacts of 0.3-0.8 percent of 
cap-subject registrants becoming cap-exempt as shown in Table 17.
[GRAPHIC] [TIFF OMITTED] TR18DE24.057

    Relative to the No-Action baseline where most registrants will not 
ultimately be selected in the random lottery to petition using Form I-
129 H-1B, the estimated 0.3-0.8 percent expansions in cap-exempt 
research non-profits result in reduced registrations as well as 
additional Form I-129 H-1B filings and fees from non-profits made 
exempt by this final rule that would not have been selected in the 
lottery. These newly cap-exempt Form I-129 fees are discounted from 
$780 to $460 and the Asylum Program fees are discounted from $600 to 
$300 consistent with research non-profits.\192\ Table 17 shows that 
cap-exemptions result in $784,693 additional payments from these new 
cap-exempt petitioners to USCIS under the 0.3-percent scenario and 
$2,083,759 additional payments from these new cap-exempt petitioners to 
USCIS under the 0.8-percent scenario. The midpoint of this range 
describes the primary estimate scenario in which these new cap-exempt 
petitioners will, on net, pay $1,434,226 to USCIS in additional fee 
revenue for cap-exempt beneficiaries. Consistent with the NPRM and 
other USCIS rulemakings, because these payments are made in exchange 
for existing services provided by USCIS, these payments are described 
as transfers from newly cap-exempt petitioners to USCIS rather than 
costs or cost savings.
---------------------------------------------------------------------------

    \192\ ``U.S. Citizenship and Immigration Services Fee Schedule 
and Changes to Certain Other Immigration Benefit Request 
Requirements,'' 89 FR 6194 (Jan. 31, 2024).
---------------------------------------------------------------------------

xv. Automatic Extension of Authorized Employment ``Cap-Gap''
    DHS is extending the automatic cap-gap extension at 8 CFR 
214.2(f)(5)(vi). Currently, the automatic extension is valid only until 
October 1 of the fiscal year for which H-1B status is being requested, 
but DHS extends this until April 1 of the fiscal year. See amended 8 
CFR 214.2(f)(5)(vi). This change will result in more flexibility for 
both students and USCIS and will help to avoid disruption to U.S. 
employers that are lawfully employing F-1 students

[[Page 103185]]

while a qualifying H-1B cap-subject petition is pending.
    Each year, a number of U.S. employers seek to employ F-1 students 
via the H-1B program by requesting a COS and filing an H-1B cap 
petition with USCIS. Many F-1 students complete a program of study or 
post-completion OPT in mid-spring or early summer. Per current 
regulations, after completing their program or post-completion OPT, F-1 
students have 60 days to take the steps necessary to maintain legal 
status or depart the United States. See 8 CFR 214.2(f)(5)(iv). However, 
because the change to H-1B status cannot occur earlier than October 1, 
an F-1 student whose program or post-completion OPT expires in mid-
spring has two or more months following the 60-day period before the 
authorized period of H-1B status begins.
    Under current regulations, the automatic cap-gap extension is valid 
only until October 1 of the fiscal year for which H-1B status is being 
requested. DHS is changing the automatic extension end date from 
October 1 to April 1 to avoid disruptions in employment authorization 
that some F-1 nonimmigrants awaiting the change to H-1B status have 
been experiencing over the past several years. Table 18 shows the 
historical pending petition volumes, for F-1 nonimmigrants awaiting H-
1B status. Preventing such employment disruptions will also benefit 
employers of F-1 nonimmigrants with cap-gap extensions. This change in 
the automatic extension end date will also allow USCIS greater 
flexibility in allocating officer resources to complete adjudications 
without the pressure of completing as many change of status (COS) 
requests as possible before October 1.
[GRAPHIC] [TIFF OMITTED] TR18DE24.058

    DHS does not have precise data on the number of cap-gap F-1 
nonimmigrants who have faced EAD disruptions. Using available 
administrative data, DHS estimated in the NPRM that between 1 and 5 
percent of F-1 nonimmigrants seeking a change of status to H-1B may 
have faced EAD disruptions.
    Current regulations allow OPT F-1 students 60 days to take the 
steps necessary to maintain legal status or depart the United States. 
See 8 CFR 214.2(f)(5)(iv). However, because the change to H-1B status 
cannot occur earlier than October 1, an F-1 student whose program or 
post-completion OPT expires in mid-spring has two or more months 
following the 60-day period before the authorized period of H-1B status 
begins. While many F-1 students complete a program of study or post-
completion OPT in mid-spring or early summer, some complete their 
programs at different times of the year, with 60-day grace periods. 
Additionally, some F-1 nonimmigrants with pending H-1B petitions may 
not have intended to work during the full period covered by this 
provision. The labor impacts of this provision of the rule would be 
constrained in these and other instances not readily available in 
USCIS's administrative data.
    DHS estimates that this change will benefit up to 5 percent (1,348) 
of the population (26,961) on an annual basis and on the low end 270 (1 
percent); however, F-1 students who are beneficiaries of H-1B cap 
petitions that provide cap-gap relief will be able to avoid employment 
disruptions while waiting to obtain H-1B status. DHS estimates that an 
F-1 student who is the beneficiary of an H-1B cap petition makes $46.14 
\193\ per hour in compensation. This compensation includes wages and 
salaries, benefits such as paid leave and insurance, and legally 
required benefits such as Social Security and Medicare.\194\
---------------------------------------------------------------------------

    \193\ $46.14 Total Employee Compensation per hour. See BLS, 
Economic News Release, ``Employer Costs for Employee Compensation--
March 2024,'' Table 1. ``Employer Costs for Employee Compensation by 
ownership [Mar. 2024],'' https://www.bls.gov/news.release/archives/ecec_06182024.htm (last visited Aug. 20, 2024).
    \194\ For a breakout of the components of total compensation, 
see BLS, Economic News Release, ``Employer Costs for Employee 
Compensation--March 2024,'' Table 1. ``Employer Costs for Employee 
Compensation by ownership [Mar. 2024],'' https://www.bls.gov/news.release/archives/ecec_06182024.htm (last visited Aug. 20, 
2024).
---------------------------------------------------------------------------

    Based on a 40-hour work week,\195\ DHS estimates the potential 
compensation for each F-1 student who is the beneficiary of an H-1B cap 
petition to be $47,996 \196\ for 6 months of employment from October 
1st to April 1st. DHS estimates that this potential compensation may be 
a benefit to F-1 students who are seeking a COS to a H-1B status. This 
benefit ranges from $12,958,920 \197\ to $64,698,608 \198\ annually, 
with a midpoint of $38,828,764. This midpoint is the primary estimate 
of transfer payments from other workers to F-1 students who remain 
employed up to six months longer than under current regulations, in the 
form of increased compensation during the additional duration of 
employment. Employers will benefit, as they will be gaining 
productivity and potential profits that the F-1 students'

[[Page 103186]]

continuing employment will provide. Companies may also benefit by not 
incurring opportunity costs associated with the next best alternative 
to the immediate labor the F-1 student will provide. DHS does not know 
what this next best alternative may be for impacted companies. For 
instance, in the absence of F-1 workers providing this labor, employers 
may redistribute the work to their other workers either as a part of 
their regular job duties or require them to work overtime, or companies 
may need to reprioritize the work, or put off certain work until a 
later time.
---------------------------------------------------------------------------

    \195\ See, e.g., 8 CFR 214.2(f)(5)(vi)(A) (describing cap-gap 
employment) and (f)(11)(ii)(B) (describing OPT and noting that it 
may be full-time).
    \196\ Calculation: $46.14 * 40 hours = $1,846 per week * 26 
weeks = $47,996 per 6 months.
    \197\ Calculation: $47,996 per 6 months * 270 (1 percent of 
26,961) F-1 students = $12,958,920.
    \198\ Calculation: $47,996 per 6 months * 1,348 (5 percent of 
26,961) F-1 students = $64,698,608.
---------------------------------------------------------------------------

    There may be additional transfers due to tax impacts associated 
with this compensation, but these transfers are difficult to quantify. 
Foreign students in F-1 status more than five calendar years are 
typically liable for Social Security and Medicare taxes \199\ in 
addition to Federal and State income taxes.
---------------------------------------------------------------------------

    \199\ See https://www.irs.gov/individuals/international-taxpayers/foreign-student-liability-for-social-security-and-medicare-taxes (last visited Sep. 26, 2024).
---------------------------------------------------------------------------

xvi. Provisions To Ensure Bona Fide Job Offer for a Specialty 
Occupation Position
a. Contracts
    DHS will codify USCIS' authority to request contracts, work orders, 
or similar evidence. See amended 8 CFR 214.2(h)(4)(iv)(C). Such 
evidence may take the form of contracts or legal agreements, if 
available, or other evidence including technical documentation, 
milestone tables, or statements of work. Evidence submitted should show 
the contractual relationship between all parties, the bona fide nature 
of the beneficiary's position, and the minimum educational requirements 
to perform the duties.
    While USCIS already has the authority to request contracts and 
other similar evidence, DHS is amending the regulations for added 
clarity. By codifying this authority, USCIS is putting stakeholders on 
notice of the kinds of evidence that could be requested to establish 
the nature of the beneficiary's work and the minimum educational 
requirements to perform the duties. This evidence, in turn, could 
establish that the petitioner has a bona fide job offer for a specialty 
occupation position for the beneficiary. Relative to the no-action 
baseline, this change has no costs associated with it, and there may be 
transparency benefits due to this change. Relative to the without-
policy baseline petitioners may have taken time to provide contracts or 
legal agreements, if available, or other evidence including technical 
documentation, milestone tables, or statements of work. DHS cannot 
estimate how much time it will have taken for petitioners to provide 
that information.
b. Bona Fide Employment
    DHS will codify its requirement that the petitioner must establish, 
at the time of filing, that it has a bona fide position in a specialty 
occupation available for the beneficiary as of the start date of the 
validity period as requested on the petition. See 8 CFR 
214.2(h)(4)(iv)(D). This change is consistent with current USCIS policy 
guidance that an H-1B petitioner must establish that the purported 
employment exists at the time of filing the petition and that it will 
employ the beneficiary in a specialty occupation.\200\ Relative to the 
no-action baseline, this change has no costs associated with it, and 
there may be transparency benefits due to this change. Relative to the 
without-policy baseline petitioners may require time to provide 
documentation to establish that their position was a bona fide position 
in a specialty occupation. DHS cannot estimate how much time it takes 
for petitioners to provide that information.
---------------------------------------------------------------------------

    \200\ See USCIS, ``Rescission of Policy Memoranda,'' PM-602-0114 
(June 17, 2020) (citing Matter of Chawathe, 25 I&N Dec. 369 (AAO 
2010)).
---------------------------------------------------------------------------

c. LCA Corresponds With the Petition
    DHS will update the regulations to expressly include DHS's existing 
authority to ensure that the LCA supports and properly corresponds with 
the accompanying H-1B petition. Relative to the no-action baseline, 
this change has no costs and may yield transparency benefits due to 
consistency between regulation and current policy. Relative to the 
without-policy baseline petitioners may have taken time to provide 
their LCA to DHS, however DHS cannot estimate how much time it will 
have taken for petitioners to provide that information.
d. Revising the Definition of U.S. Employer
    DHS is revising the definition of ``United States employer.'' 
First, DHS will eliminate the employer-employee relationship 
requirement. In place of the employer-employee relationship 
requirement, DHS will codify the requirement that the petitioner has a 
bona fide job offer for the beneficiary to work, which may include 
telework, remote work, or other off-site work within the United States. 
DHS also will replace the requirement that the petitioner ``[e]ngages a 
person to work within the United States'' with the requirement that the 
petitioner have a legal presence and is amenable to service of process 
in the United States. Relative to the no-action baseline, this change 
has no costs associated with it, and there may be transparency benefits 
due to this change. Relative to the without-policy baseline, 
petitioners may require time to provide documentation establishing a 
bona fide job offer for the beneficiary to work. DHS cannot estimate 
how much time petitioners take to provide that information.
e. Employer-Employee Relationship
    DHS will remove from the definition of U.S. employer the reference 
to an employer-employee relationship requirement, which, in the past, 
was interpreted using common law principles and was a significant 
barrier to the H-1B program for certain petitioners, including 
beneficiary-owned petitioners. This proposed change is consistent with 
current USCIS policy guidance and will promote clarity and transparency 
in the regulations. This change will benefit petitioners because it may 
decrease confusion and increase clarity for stakeholders. Relative to 
the no-action baseline, this change has no costs associated with it, 
and there may be transparency benefits due to this change. Relative to 
the without-policy baseline petitioners may have taken time to 
understand the change.
xvii. Beneficiary-Owners
    DHS codifies a petitioner's ability to qualify as a U.S. employer 
even when the beneficiary possesses a controlling interest in that 
petitioner. To promote access to H-1Bs for entrepreneurs, start-up 
entities, and other beneficiary-owned businesses, DHS will add 
provisions to specifically address situations where a potential H-1B 
beneficiary owns a controlling interest in the petitioning entity. If 
more entrepreneurs are able to obtain H-1B status to develop their 
business enterprise, the United States could benefit from the creation 
of jobs, new industries, and new opportunities.\201\ This change will

[[Page 103187]]

benefit H-1B petitions filed by start-up entities and other 
beneficiary-owned businesses, or filed on behalf of entrepreneurs who 
have a controlling interest in the petitioning entity. DHS is unable to 
estimate how many petitioners will benefit from this change.
---------------------------------------------------------------------------

    \201\ See, e.g., National Bureau of Economic Research, ``Winning 
the H-1B Visa Lottery Boosts the Fortunes of Startups'' (Jan. 2020), 
https://www.nber.org/digest/jan20/winning-h-1b-visa-lottery-boosts-fortunes-startups (``The opportunity to hire specialized foreign 
workers gives startups a leg up over their competitors who do not 
obtain visas for desired employees. High-skilled foreign labor 
boosts a firm's chance of obtaining venture capital funding, of 
successfully going public or being acquired, and of making 
innovative breakthroughs.''). Pierre Azoulay, et al., ``Immigration 
and Entrepreneurship in the United States'' (National Bureau of 
Economic Research, Working Paper 27778 (Sept. 2020) https://www.nber.org/system/files/working_papers/w27778/w27778.pdf 
(``immigrants act more as `job creators' than `job takers' and . . . 
non-U.S. born founders play outsized roles in U.S. high-growth 
entrepreneurship'').
---------------------------------------------------------------------------

    DHS is also providing new guardrails for beneficiary-owned 
entities, including limiting the validity period for beneficiary-owned 
entities' initial petition and first extension (including an amended 
petition with a request for an extension of stay) of such a petition to 
18 months. See amended 8 CFR 214.2(h)(9)(iii)(E). Any subsequent 
extension will not be limited and may be approved for up to 3 years, 
assuming the petition satisfies all other H-1B requirements. DHS is 
limiting the first two validity periods to 18 months as a safeguard 
against possible fraudulent petitions. While DHS sees a significant 
advantage in promoting the H-1B program to entrepreneurs and allowing 
these beneficiaries to perform a significant amount of non-specialty 
occupation duties, unscrupulous petitioners might abuse such provisions 
without sufficient guardrails. DHS believes that there may be a cost to 
petitioners associated with this change however cannot estimate how 
many petitioners may be affected by limiting the validity period. DHS 
is also finalizing the provision that a beneficiary-owner may perform 
duties that are directly related to owning and directing the 
petitioner's business as long as the beneficiary will perform specialty 
occupation duties a majority of the time, consistent with the terms of 
the H-1B petition. DHS believes that there may be a cost to petitioners 
associated with this change however cannot estimate how many 
petitioners may be affected.
xviii. Site Visits
    USCIS conducts inspections, evaluations, verifications, and 
compliance reviews, to ensure that a petitioner and beneficiary are 
eligible for the benefit sought and that all laws have been complied 
with before and after approval of such benefits. These inspections, 
verifications, and other compliance reviews may be conducted 
telephonically or electronically, as well as through physical on-site 
inspections (site visits). DHS is adding regulations specific to the H-
1B program to codify its existing authority and clarify the scope of 
inspections and the consequences of a petitioner's or third party's 
refusal or failure to fully cooperate with these inspections. Using its 
general authority, USCIS may conduct audits, on-site inspections, 
reviews, or investigations to ensure that a petitioner and beneficiary 
are entitled to the benefits sought and that all laws have been 
complied with before and after approval of such benefits.\202\ The 
authority to conduct on-site inspection is critical to the integrity of 
the H-1B program to detect and deter fraud and noncompliance.
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    \202\ See INA section 103 and 8 CFR 2.1. As stated in subsection 
V.A.5.ii(d) of this analysis, regulation would also clarify the 
possible scope of an inspection, which may include the petitioning 
organization's headquarters, satellite locations, or the location 
where the beneficiary works or will work, including third-party 
worksites, as applicable.
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    In July 2009, USCIS started the Administrative Site Visit and 
Verification Program \203\ as an additional method to verify 
information in certain visa petitions under scrutiny. Under this 
program, FDNS officers are authorized to make unannounced site visits 
to collect information as part of a compliance review, which verifies 
whether petitioners and beneficiaries are following the immigration 
laws and regulations that are applicable in a particular case. This 
process includes researching information in government databases, 
reviewing public records and evidence accompanying the petition, 
interviewing the petitioner or beneficiary, and conducting site visits. 
Once the FDNS officers complete the site visit, they write a Compliance 
Review Report for any indicators of fraud or noncompliance to assist 
USCIS in final adjudicative decisions.
---------------------------------------------------------------------------

    \203\ See USCIS, ``Administrative Site Visit and Verification 
Program,'' https://www.uscis.gov/about-us/directorates-and-program-offices/fraud-detection-and-national-security/administrative-site-visit-and-verification-program (last visited Sept. 18, 2019). See 
USCIS, ``Administrative Site Visit and Verification Program,'' 
https://www.uscis.gov/about-us/directorates-and-program-offices/fraud-detection-and-national-security/administrative-site-visit-and-verification-program (last visited Sept. 18, 2019). See USCIS, 
``Administrative Site Visit and Verification Program,'' https://www.uscis.gov/about-us/directorates-and-program-offices/fraud-detection-and-national-security/administrative-site-visit-and-verification-program https://www.uscis.gov/about-us/directorates-and-program-offices/fraud-detection-and-national-security/administrative-site-visit-and-verification-program (last visited 
Sept. 18, 2019).
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    The site visits conducted under USCIS's existent, general 
authority, and thus part of the baseline against which this rule's 
impact should be measured, have uncovered a significant amount of 
noncompliance in the H-1B program.\204\ Further, when disaggregated by 
worksite location, the noncompliance rate was found to be higher for 
workers placed at an off-site or third-party location compared to 
workers placed at a petitioner's on-site location.\205\ As a result, 
USCIS began conducting more targeted site visits related to the H-1B 
program, focusing on the cases of H-1B dependent employers (i.e., 
employers who have a high ratio of H-1B workers compared to U.S. 
workers, as defined by statute) for whom USCIS cannot validate the 
employer's basic business information through commercially available 
data, and on employers petitioning for H-1B workers who work off-site 
at another company or organization's location.
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    \204\ USCIS, Office of Policy and Strategy, PRD, Summary of H-1B 
Site Visits Data.
    \205\ Id.
---------------------------------------------------------------------------

    DHS believes that site visits are important to maintain the 
integrity of the H-1B program to detect and deter fraud and 
noncompliance in the H-1B program, which in turn ensures the 
appropriate use of the H-1B program and the protection of the interests 
of U.S. workers. These site visits will continue in the absence of this 
rule and DHS notes that current Form I-129 instructions notify 
petitioners of USCIS' legal authority to verify information before or 
after a case decision, including by means of unannounced physical site 
inspection. Hence, DHS is adding additional requirements specific to 
the H-1B program to set forth the scope of on-site inspections, and the 
consequences of a petitioner's or third party's refusal or failure to 
fully cooperate with existing inspections. DHS does not foresee the 
rule leading to more on-site inspections.
    This rule will provide a clear disincentive for petitioners that do 
not cooperate with compliance reviews and inspections while giving 
USCIS greater authority to access and confirm information about 
employers and workers as well as identify fraud.
    The regulations will make clear that inspections may include, but 
are not limited to, an on-site visit of the petitioning organization's 
facilities, interviews with its officials, review of its records 
related to compliance with immigration laws and regulations, and 
interviews with any other individuals or review of any other records 
that USCIS may lawfully obtain and that it considers pertinent to 
verify facts related to the adjudication of the petition, such as facts 
relating to the petitioner's and beneficiary's eligibility and 
continued compliance with the requirements of the H-1B program. See 
amended 8 CFR 214.2(h)(4)(i)(B)(2). The regulation will also clarify 
that an

[[Page 103188]]

inspection may take place at the petitioning organization's 
headquarters, satellite locations, or the location where the 
beneficiary works or will work, including third-party worksites, as 
applicable. The provisions will make clear that an H-1B petitioner or 
any employer must allow access to all sites where the labor will be 
performed for the purpose of determining compliance with applicable H-
1B requirements. The regulation will state the consequences if USCIS is 
unable to verify facts related to an H-1B petition, including due to 
the failure or refusal of the petitioner or a third-party worksite to 
cooperate with a site visit. These failures or refusals may be grounds 
for denial or revocation of any H-1B petition related to locations that 
are a subject of inspection, including any third-party worksites. See 
amended 8 CFR 214.2(h)(4)(i)(B)(2).
    In order to estimate the population impacted by site visits, DHS 
uses site inspection data used to verify facts pertaining to the H-1B 
petition adjudication process. The site inspections were conducted at 
H-1B petitioners' on-site locations and third-party worksites during FY 
2019 through FY 2023. For instance, from FY 2019 through FY 2023, USCIS 
conducted a total of 32,366 H-1B compliance reviews and found 6,206 of 
them, equal to 19 percent, to be noncompliant or indicative of 
fraud.\206\ These compliance reviews (from FY 2019 through FY 2023) 
consisted of reviews conducted under both the Administrative Site Visit 
and Verification Program and the Targeted Site Visit and Verification 
Program, which began in 2017. The targeted site visit program allows 
USCIS to focus resources where fraud and abuse of the H-1B program may 
be more likely to occur.\207\
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    \206\ DHS, USCIS, PRD (2023). PRD399. USCIS conducted these site 
visits through its Administrative and Targeted Site Visit Programs.
    \207\ See USCIS, ``Putting American Workers First: USCIS 
Announces Further Measures to Detect H-1B Visa Fraud and Abuse'' 
(April 3, 2017), https://www.uscis.gov/archive/putting-american-workers-first-uscis-announces-further-measures-to-detect-h-1b-visa-fraud-and-abuse.
---------------------------------------------------------------------------

    Table 19 shows the number of H-1B worksite inspections conducted 
each year and the number of visits that resulted in compliance and 
noncompliance. USCIS found a low of 1,061 fraudulent/noncompliant cases 
in FY 2022, and a high of 1,473 fraudulent/noncompliant cases in FY 
2021. DHS estimates that, on average, USCIS conducted 6,473 H-1B 
worksite inspections annually from FY 2019 through FY 2023 and of those 
DHS finds a noncompliance rate of 19 percent. Assuming USCIS continues 
worksite inspections at the 5-year annual average rate, the population 
impacted by this provision will be 1,241 or 19 percent of H-1B 
petitioners visited who are found noncompliant or indicative of fraud. 
The outcomes of site visits under the rule are indeterminate as 
currently noncooperative petitioners might be found to be fully 
compliant, might continue to not cooperate with site visits despite 
penalties, or might be forced to reveal fraudulent practices to USCIS. 
The expected increase in cooperation from current levels will be the 
most important impact of the provision, which DHS discusses below. DHS 
notes that the increased cooperation might come disproportionately from 
site visits of third-party worksites that did not sign Form I-129 
attesting to permit unannounced physical site inspections of residences 
and places of employment by USCIS.
[GRAPHIC] [TIFF OMITTED] TR18DE24.059


[[Page 103189]]


    Table 20 shows the average duration of time to complete each 
inspection was 1.09 hours. Therefore, DHS assumes that USCIS will 
continue to conduct the same number of annual worksite inspections 
(6,929), on average, and that the average duration of time for a USCIS 
immigration officer to conduct each worksite inspection will be an 
average of 1.09 hours. The data in Tables 19 and 20 differ slightly 
based on the different search criteria, pull dates and systems 
accessed. DHS also assumes that the average duration of time of 1.09 
hours to conduct an inspection covers the entire inspection process, 
which includes interviewing the beneficiary, the on-site supervisor or 
manager and other workers, as applicable, and reviewing all records 
pertinent to the H-1B petitions available to USCIS when requested 
during inspection.
[GRAPHIC] [TIFF OMITTED] TR18DE24.060

    DHS assumes that a supervisor or manager, in addition to the 
beneficiary, will be present on behalf of a petitioner while a USCIS 
immigration officer conducts the worksite inspection. The officer will 
interview the beneficiary to verify the date employment started, work 
location, hours, salary, and duties performed to corroborate with the 
information provided in an approved petition. The supervisor or manager 
will be the most qualified employee at the location who could answer 
all questions pertinent to the petitioning organization and its H-1B 
nonimmigrant workers. They will also be able to provide the proper 
records available to USCIS immigration officers. Consequently, for the 
purposes of this economic analysis, DHS assumes that on average two 
individuals will be interviewed during each worksite inspection: the 
beneficiary and the supervisor or manager. DHS uses their respective 
compensation rates in the estimation of the worksite inspection 
costs.\208\ However, if any other worker or on-site manager is 
interviewed, the same compensation rates will apply.
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    \208\ DHS does not estimate any other USCIS costs associated 
with the worksite inspections (i.e., travel and deskwork relating to 
other research, review and document write up) here because these 
costs are covered by fees collected from petitioners filing Form I-
129 for H-1B petitions. All such costs are discussed under the 
Federal Government Cost section.
---------------------------------------------------------------------------

    DHS uses hourly compensation rates to estimate the opportunity cost 
of time a beneficiary and supervisor or manager will incur during 
worksite inspections. Based on data obtained from a USCIS report in 
2024, DHS estimates that an H-1B worker earned an average of $130,000 
per year in FY 2023.\209\ DHS therefore estimates the salary of an H-1B 
worker is approximately $130,000 annually, or $62.50 hourly wage.\210\ 
The annual salary does not include noncash compensation and benefits, 
such as health insurance and transportation. DHS adjusts the average 
hourly wage rate using a benefits-to-wage multiplier to estimate the 
average hourly compensation of $90.63 for an H-1B nonimmigrant 
worker.\211\ In order to estimate the opportunity cost of time they 
will incur during a worksite inspection, DHS uses an average hourly 
compensation rate of $96.03 per hour for a supervisor or manager, where 
the average hourly wage is $66.23 per hour worked and average benefits 
are $29.80.\212\ While the average duration of time to conduct an 
inspection is estimated at 1.09 hours in this analysis, DHS is not able 
to estimate the average duration of time for a USCIS immigration 
officer to conduct an interview with a beneficiary or supervisor or 
manager. In the absence of this information, DHS assumes that it will 
on average take 0.545 hours to interview a beneficiary and 0.545 hours 
to interview a supervisor or manager.\213\
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    \209\ This is the annual average earning of all H-1B 
nonimmigrant workers in all industries with known occupations 
(excluding industries with unknown occupations) for FY 2023. It is 
what employers agreed to pay the nonimmigrant workers at the time 
the applications were filed and estimated based on full-time 
employment for 12 months, even if the nonimmigrant worker worked 
fewer than 12 months. USCIS, ``Characteristics of H-1B Specialty 
Occupation Workers, Fiscal Year 2023 Annual Report to Congress, 
October 1, 2022-September 30, 2023,'' at 50, Table 9a (Mar. 6, 
2024). See https://www.uscis.gov/sites/default/files/document/reports/OLA_Signed_H-1B_Characteristics_Congressional_Report_FY2023.pdf (last visited 
Aug. 21, 2024).
    \210\ The hourly wage is estimated by dividing the annual salary 
by the total number of hours worked in a year (2,080, which is 40 
hours of full-time workweek for 52 weeks). $62.50 hourly wage = 
$130,000 annual pay / 2,080 annual work hours. According to DOL that 
certifies the LCA of the H-1B worker, a full-time H-1B employee 
works 40 hours per week for 52 weeks for a total of 2,080 hours in a 
year assuming full-time work is 40 hours per week. DOL, Wage and 
hour Division: ``Fact Sheet # 68--What Constitutes a Full-Time 
Employee Under H-1B Visa Program?'' (July 2009), https://www.dol.gov/whd/regs/compliance/whdfs68.htm (last visited July 30, 
2019).
    \211\ Hourly compensation of $90.63 = $62.50 average hourly wage 
rate for H-1B worker x 1.45 benefits-to-wage multiplier. See section 
V.A.5. for estimation of the benefits-to-wage multiplier.
    \212\ Hourly compensation of $96.03 = $66.23 average hourly wage 
rate for Management Occupations (national) x 1.45 benefits-to-wage 
multiplier. See BLS, ``Occupational Employment and Wage Statistics, 
Occupational Employment and Wages, May 2023, 11-0000 Management 
Occupations (Major Group),'' https://www.bls.gov/oes/2023/may/oes110000.htm (last visited Aug. 20, 2024).
    \213\ DHS assumes that beneficiary takes 50 percent of average 
inspection duration and supervisor, or manager takes 50 percent. 
Average duration of interview hours for beneficiaries (0.545) = 
Average inspection duration (1.09) x 50% = 0.545. Average duration 
of interview hours for Supervisors or managers (0.545) = Average 
inspection duration (1.09) x 50% = 0.545.

---------------------------------------------------------------------------

[[Page 103190]]

    In Table 21, DHS estimates the total annual opportunity cost of 
time for worksite inspections of H-1B petitions by multiplying the 
average annual number of worksite inspections (6,929) by the average 
duration the interview will take for a beneficiary or supervisor or 
manager and their respective compensation rates. DHS obtains the total 
annual cost of the H-1B worksite inspections to be $704,886 for this 
rule.
[GRAPHIC] [TIFF OMITTED] TR18DE24.061

    This change may affect employers who do not cooperate with site 
visits who will face denial or revocation of their petition(s), which 
could result in costs to those businesses. Petitioners may face 
financial losses because they may lose access to labor for extended 
periods, which could result in too few workers, loss of revenue, and 
some could go out of business. DHS expects program participants to 
comply with program requirements, however, and notes that those that do 
not could experience significant impacts due to this rule.
xix. Third-Party Placement (Codifying Policy Based on Defensor v. 
Meissner (5th Cir. 2000))
    Amended 8 CFR 214.2(h)(4)(i)(B)(3) clarifies that, in certain 
circumstances USCIS will look at the third party's requirements for the 
beneficiary's position, rather than the petitioner's stated 
requirements, in assessing whether the proffered position qualifies as 
a specialty occupation.
    As required by both INA section 214(i)(1) and 8 CFR 
214.2(h)(4)(i)(A)(1), an H-1B petition for a specialty occupation 
worker must demonstrate that the worker will perform services in a 
specialty occupation, which requires theoretical and practical 
application of a body of highly specialized knowledge and attainment of 
a baccalaureate or higher degree in the specific specialty (or its 
equivalent) as a minimum requirement for entry into the occupation in 
the United States. This provision will ensure that petitioners are not 
circumventing specialty occupation requirements by imposing token 
requirements or requirements that are not normal to the third party. 
Specifically, under amended 8 CFR 214.2(h)(4)(i)(B)(3), if the 
beneficiary will be staffed to a third party, meaning they will be 
contracted to fill a position in a third party's organization and 
becomes part of that third party's organizational hierarchy by filling 
a position in that hierarchy (and not merely providing services to the 
third party), the actual work to be performed by the beneficiary must 
be in a specialty occupation. Therefore, it is the requirements of that 
third party, and not the petitioner, that are most relevant when 
determining whether the position is a specialty occupation. Relative to 
the no-action baseline, this change has no costs associated with it, 
and there may be transparency benefits due to this change. Relative to 
the without-policy baseline some petitioners for third parties may have 
taken time to demonstrate that the worker will perform services in a 
specialty occupation for that third party. Because this has been in 
place for a long time, DHS cannot estimate how much time it will have 
taken for petitioners to provide that information.
4. Alternatives Considered
    In the NPRM, DHS sought public comment on how to ensure that the 
limited number of H-1B cap-subject visas, and new H-1B status grants 
available each fiscal year are used for non-speculative job 
opportunities. DHS has reviewed public comments, including suggested 
alternatives, on the various provisions in the NPRM and responded 
above.
5. Total Quantified Net Costs of the Final Regulatory Changes
    In this section, DHS presents the total annual cost savings of this 
final rule annualized over a 10-year period of analysis. Table 22 
details the annual cost savings of this rule. DHS estimates the total 
cost savings is $1,038,721.

[[Page 103191]]

[GRAPHIC] [TIFF OMITTED] TR18DE24.062

    DHS summarizes the annual costs of this rule. Table 23 details the 
annual costs of this rule. DHS estimates the total cost is $704,886.
[GRAPHIC] [TIFF OMITTED] TR18DE24.063

    Net costs savings to the public of $333,835 are the total costs 
minus cost savings.\214\ Table 24 illustrates that over a 10-year 
period of analysis from FY 2024 through FY 2033 annualized cost savings 
will be $333,835 using a 2-percent discount rates.
---------------------------------------------------------------------------

    \214\ Calculations: $1,038,721 Total Costs Savings-$704,886 
Total Costs = $333,835 Net Cost Savings.
[GRAPHIC] [TIFF OMITTED] TR18DE24.064

B. Regulatory Flexibility Act

    The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601 and 602, 
as amended by the Small Business Regulatory Enforcement Fairness Act of 
1996, Public Law 104-121, requires Federal agencies to consider the 
potential impact of regulations on small businesses, small governmental 
jurisdictions, and small organizations during the development of their 
rules. The term ``small entities'' comprises small businesses, not-for-
profit organizations that are independently owned and operated and are 
not dominant in their fields, and governmental jurisdictions with 
populations of less than 50,000.\215\
---------------------------------------------------------------------------

    \215\ A small business is defined as any independently owned and 
operated business not dominant in its field that qualifies as a 
small business per the Small Business Act, 15 U.S.C. 632.
---------------------------------------------------------------------------

    An ``individual'' is not considered a small entity and costs to an 
individual are not considered a small entity impact for RFA purposes. 
In addition, the courts have held that the RFA requires an agency to 
perform a regulatory flexibility analysis of small entity impacts only 
when a rule directly regulates small entities.\216\ Consequently, 
indirect impacts from a

[[Page 103192]]

rule on a small entity are not considered as costs for RFA purposes. 
USCIS acknowledges that the rule could have indirect impacts on small 
entities including, but not limited to, costs associated with the time 
required to comply with the site visits provision. These indirect 
impacts are not included within the RFA because of uncertainty related 
to how many small entities would be affected and the degree to which 
affected entities would be impacted. The Regulatory Impact Analysis 
included above contains in-depth analysis of those possible impacts and 
how they may impact small entities.
---------------------------------------------------------------------------

    \216\ See Small Business Administration, ``A Guide For 
Government Agencies, How to Comply with the Regulatory Flexibility 
Act,'' at 22, https://advocacy.sba.gov/wp-content/uploads/2019/06/How-to-Comply-with-the-RFA.pdf (last visited Aug. 23, 2024).
---------------------------------------------------------------------------

    USCIS's RFA analysis for this final rule focuses on the population 
of Form I-129 petitions for H-1B workers.

C. Final Regulatory Flexibility Act (FRFA)

6. A Statement of the Need for, and Objectives of, the Rule
    The purpose of this rulemaking is to modernize and improve the 
regulations relating to the H-1B program by: (1) streamlining the 
requirements of the H-1B program and improving program efficiency; (2) 
providing greater benefits and flexibility for petitioners and 
beneficiaries; and (3) improving integrity measures.
7. A Statement of the Significant Issues Raised by the Public Comments 
in Response to the IRFA, a Statement of the Assessment of the Agency of 
Such Issues, and a Statement of any Changes Made in the Proposed Rule 
as a Result of Such Comments
    DHS invited comments in the NPRM but did not receive any comments 
specific to the IRFA. USCIS responded to general comments concerning 
the rule in section III (Public Comments on the Proposed Rule).
8. The Response of the Agency to Any Comments Filed by the Chief 
Counsel for Advocacy of the Small Business Administration in Response 
to the Proposed Rule, and a Detailed Statement of Any Change Made to 
the Proposed Rule in the Final Rule as a Result of the Comments
    DHS invited comments in the NPRM but did not receive any comments 
filed by the Chief Counsel for Advocacy of the Small Business 
Administration.
9. A Description and an Estimate of the Number of Small Entities to 
Which the Rule Will Apply or an Explanation of Why No Such Estimate Is 
Available
    For this analysis, due to the impracticality of full population 
analysis, DHS conducted a sample analysis of historical Form I-129 H-1B 
petitions to estimate the number of small entities impacted by this 
rule. DHS utilized a subscription-based electronic database of U.S. 
entities, ReferenceUSA, as well as three other open-access, free 
databases of public and private entities, Manta, Cortera, and Guidestar 
to determine the North American Industry Classification System (NAICS) 
code, revenue, and employee count for each entity. To determine whether 
an entity is small for purposes of RFA, DHS first classified the entity 
by its NAICS code and then used Small Business Administration (SBA) 
guidelines to classify the revenue or employee count threshold for each 
entity. Some entities were classified as small based on their annual 
revenue, and some by their numbers of employees.
    Using FY 2022 internal data on actual filings of Form I-129 H-1B 
petitions, DHS identified 44,593 unique entities. DHS devised a 
methodology to conduct the small entity analysis based on a 
representative, random sample of the potentially impacted population. 
DHS first determined the minimum sample size necessary to achieve a 95-
percent confidence level confidence interval estimation for the 
impacted population of entities using the standard statistical formula 
at a 5-percent margin of error. DHS then created a sample size greater 
than the minimum necessary to increase the likelihood that our matches 
would meet or exceed the minimum required sample. DHS notes that the 
random sample was drawn from the population of Form I-129 H-1B 
petitioners for purposes of estimating impacts of each provision in the 
NPRM, including those finalized here, on the population of Form I-129 
H-1B petitioners at-large.
    DHS randomly selected a sample of 3,396 entities from the 
population of 44,593 entities that filed Form I-129 for H-1B petitions 
in FY 2022. Of the 3,396 entities, 1,724 entities returned a successful 
match of a filing entity in the ReferenceUSA, Manta, Cortera, and 
Guidestar databases; 1,672 entities did not return a match. Using these 
databases' revenue or employee count and their assigned NAICS code, DHS 
determined 1,209 of the 1,724 matches to be small entities, 515 to be 
non-small entities. DHS assumes filing entities without database 
matches or missing revenue/employee count data are likely to be small 
entities. As a result, in order to prevent underestimating the number 
of small entities this final rule will affect, DHS considers all the 
non-matched and missing entities as small entities for the purpose of 
this analysis. Therefore, DHS classifies 2,881 of 3,396 entities as 
small entities, including combined non-matches (1,672), and small 
entity matches (1,209). Thus, DHS estimates that 84.8 percent (2,881 of 
3,396) of the entities filing Form I-129 H-1B petitions are small 
entities.
    In this analysis DHS assumes that the distribution of firm size for 
our sample is the same as the entire population of Form I-129 H-1B 
petitioners. Thus, DHS estimates the number of small entities to be 
84.8 percent of the population of 44,593 entities that filed Form I-129 
under the H-1B classification, as summarized in Table 25 below. The 
annual numeric estimate of the small entities impacted by this final 
rule is 37,815 entities.\217\
---------------------------------------------------------------------------

    \217\ The annual numeric estimate of the small entities (37,815) 
= Population (44,593) * Percentage of small entities (84.8%).
[GRAPHIC] [TIFF OMITTED] TR18DE24.065


[[Page 103193]]


    Following the distributional assumptions above, DHS uses the set of 
1,209 small entities with matched revenue data to estimate the economic 
impact of the final rule on each small entity. Typically, DHS will 
estimate the economic impact, in percentage, for each small entity is 
the sum of the impacts of the final changes divided by the entity's 
sales revenue.\218\ DHS constructed the distribution of economic impact 
of the final rule based on the 1,209 small entity matches in the 
sample. Because this final rule resulted in an overall cost savings for 
petitioners there also would be no adverse impact on the estimated 
small entity population. Based on FY 2022 revenue, of the 1,209 small 
entities, 0 percent (0 small entities) would experience a cost increase 
that is greater than 1 percent of revenues.
---------------------------------------------------------------------------

    \218\ The economic impact, in percentage, for each small entity 
i = ((Cost of one petition for entity i x Number of petitions for 
entity i)/Entity i's sales revenue) x 100. The cost of one petition 
for entity i (-$0.79) is estimated by dividing the total cost of 
this rule by the estimated population. -$333,835/421,421 = -$0.79. 
The entity's sales revenue is taken from ReferenceUSA, Manta, 
Cortera, and Guidestar databases.
---------------------------------------------------------------------------

10. A Description of the Projected Reporting, Recordkeeping, and Other 
Compliance Requirements of the Rule, Including an Estimate of the 
Classes of Small Entities That Will be Subject to the Requirement and 
the Types of Professional Skills Necessary for Preparation of the 
Report or Record
    This rule codifies USCIS' existing authority to conduct site visits 
and clarify the scope of inspections and the consequences of a 
petitioner's or third party's refusal or failure to fully cooperate 
with these inspections, and supervisors of H-1B beneficiaries will bear 
an opportunity cost of time as described above.
11. A Description of the Steps the Agency has Taken To Minimize the 
Significant Economic Impact on Small Entities Consistent With the 
Stated Objectives of Applicable Statutes, Including a Statement of the 
Factual, Policy, and Legal Reasons for Selecting the Alternative 
Adopted in the Final Rule and why Each of the Other Significant 
Alternatives to the Rule Considered by the Agency was Rejected
    While the site visit provision imposes some burden to prospective 
employers, USCIS found no other alternatives that achieved stated 
objectives with less burden to small entities.

D. Unfunded Mandates Reform Act of 1995 (UMRA)

    The Unfunded Mandates Reform Act of 1995 (UMRA) is intended, among 
other things, to curb the practice of imposing unfunded Federal 
mandates on State, local, and Tribal governments. Title II of UMRA 
requires each Federal agency to prepare a written statement assessing 
the effects of any Federal mandate in a proposed rule, or final rule 
for which the agency published a proposed rule, that includes any 
Federal mandate that may result in a $100 million or more expenditure 
(adjusted annually for inflation) in any one year by State, local, and 
Tribal governments, in the aggregate, or by the private sector.\219\
---------------------------------------------------------------------------

    \219\ See 2 U.S.C. 1532(a).
---------------------------------------------------------------------------

    The inflation adjusted value of $100 million in 1995 is 
approximately $200 million in 2023 based on the Consumer Price Index 
for All Urban Consumers (CPI-U).\220\ This final rule does not contain 
a Federal mandate as the term is defined under UMRA.\221\ The 
requirements of title II of UMRA, therefore, do not apply, and DHS has 
not prepared a statement under UMRA.
---------------------------------------------------------------------------

    \220\ See BLS, ``Historical Consumer Price Index for All Urban 
Consumers (CPI-U): U.S. city average, all items, by month,'' https:/
www.bls.gov/cpi/tables/supplemental-files/historical-cpi-u-202312.pdf (last visited Jan. 17, 2024). Calculation of inflation: 
(1) Calculate the average monthly CPI-U for the reference year 
(1995) and the current year (2023); (2) Subtract reference year CPI-
U from current year CPI-U; (3) Divide the difference of the 
reference year CPI-U and current year CPI-U by the reference year 
CPI-U; (4) Multiply by 100 = [(Average monthly CPI-U for 2023-
Average monthly CPI-U for 1995) / (Average monthly CPI-U for 
1995)]x100 = [(304.702-152.383) /152.383] = (152.319/152.383) = 
0.99958001x100 = 99.96 percent = 100 percent (rounded). Calculation 
of inflation-adjusted value: $100 million in 1995 dollarsx2.00 = 
$200 million in 2023 dollars.
    \221\ The term ``Federal mandate'' means a Federal 
intergovernmental mandate or a Federal private sector mandate. See 2 
U.S.C. 1502(1), 658(6).
---------------------------------------------------------------------------

E. Congressional Review Act

    OIRA has determined that this final rule is not a major rule, as 
defined in 5 U.S.C. 804, for purposes of congressional review of agency 
rulemaking pursuant to the Congressional Review Act, Pub. L. 104-121, 
title II, sec. 251 (Mar. 29, 1996), 110 Stat. 868 (codified at 5 U.S.C. 
801-808). This rule will not result in an annual effect on the economy 
of $100 million or more.
    DHS will send this rule to Congress and to the Comptroller General 
as required by 5 U.S.C. 801(a)(1).

F. Executive Order 13132 (Federalism)

    This final rule would not have substantial direct effects on the 
States, on the relationship between the National Government and the 
States, or on the distribution of power and responsibilities among the 
various levels of government. Therefore, in accordance with section 6 
of Executive Order 13132, it is determined that this final rule does 
not have sufficient federalism implications to warrant the preparation 
of a federalism summary impact statement.

G. Executive Order 12988 (Civil Justice Reform)

    This final rule was drafted and reviewed in accordance with E.O. 
12988, Civil Justice Reform. This final rule was written to provide a 
clear legal standard for affected conduct and was carefully reviewed to 
eliminate drafting errors and ambiguities, so as to minimize litigation 
and undue burden on the Federal court system. DHS has determined that 
this final rule meets the applicable standards provided in section 3 of 
E.O. 12988.

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

    This final rule does not have ``tribal implications'' because it 
will not have substantial direct effects on one or more Indian Tribes, 
on the relationship between the Federal Government and Indian Tribes, 
or on the distribution of power and responsibilities between the 
Federal Government and Indian Tribes. Accordingly, E.O. 13175, 
Consultation and Coordination with Indian Tribal Governments, requires 
no further agency action or analysis.

I. National Environmental Policy Act (NEPA)

    As discussed in the National Environmental Policy Act (NEPA) \222\ 
section of the NPRM,\223\ and partially addressed in the H-1B 
Registration Improvement final rule,\224\ DHS proposed a broader set of 
reforms in the H-1B program, as well as discrete reforms impacting 
other nonimmigrant programs. DHS received one public comment on the 
NEPA discussion in the NPRM. DHS is addressing that comment here to the 
extent it pertains to the provisions of this final rule. DHS previously 
addressed this public comment in the rule that finalized the 
registration process aspects of the NPRM.\225\
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    \222\ See Public Law 91-190, 42 U.S.C. 4321-4347.
    \223\ 88 FR 72870, 72955 (Oct. 23, 2023).
    \224\ ``Improving the H-1B Registration Selection Process and 
Program Integrity,'' 89 FR 7456, 7489 (Feb. 2, 2024) (final rule).
    \225\ 89 FR 7456, 7489 (Feb. 2, 2024).
---------------------------------------------------------------------------

    Comment: One commenter asserted that DHS's reliance on categorical

[[Page 103194]]

exclusion (``CATEX'') A3 is arbitrary and capricious and indicated that 
DHS must prepare an environmental impact statement or at least an 
environmental assessment before finalizing the NPRM.\226\ The commenter 
asserted that the action proposed in the NPRM is an action that, by its 
nature, increases the population because its goal is to increase the 
number of foreign nationals who enter the country. The commenter argued 
that the action proposed in the NPRM has the potential to have a 
cumulative effect when combined with other actions that increase levels 
of immigration, and that it should be considered rather than 
categorically excluded. The commenter further stated that DHS's use of 
categorical exclusion A3 is ``entirely irrational'' because DHS could 
not assess the environmental impact of the rule and thus concluded that 
the rule is of the type that would not have any. The commenter further 
stated that the NPRM does not fit into any of the categories under 
CATEX A3, and that DHS was not considering rules that increase 
immigration to the United States when it formulated this rule.
---------------------------------------------------------------------------

    \226\ The commenter stated: ``Categorical exclusion A3, in full, 
is as follows: A3 Promulgation of rules, issuance of rulings or 
interpretations, and the development and publication of policies, 
orders, directives, notices, procedures, manuals, advisory 
circulars, and other guidance documents of the following nature: (a) 
Those of a strictly administrative or procedural nature; (b) Those 
that implement, without substantive change, statutory or regulatory 
requirements; (c) Those that implement, without substantive change, 
procedures, manuals, and other guidance documents; (d) Those that 
interpret or amend an existing regulation without changing its 
environmental effect; (e) Technical guidance on safety and security 
matters; or (f) Guidance for the preparation of security plans.''
---------------------------------------------------------------------------

    Response: DHS disagrees with both the factual and the legal 
assertions made by this commenter. The commenter cited no data, 
analysis, evidence, or statements made by DHS in the NPRM to support 
the commenter's assertion. Specifically with respect to the provisions 
being finalized through this final rule, the intended and expected 
impact of those provisions is not anticipated to significantly increase 
the number of foreign nationals in the United States. Rather, as 
discussed throughout this preamble, DHS is amending existing 
regulations to primarily modernize the H-1B program but is also 
including certain provisions that impact other nonimmigrant programs--
H-2, H-3, F-1, L-1, O, P, Q-1, R-1, E-3, and TN. In addition, the final 
rule will provide certain benefits and flexibilities, as well as 
improve program integrity. These amendments to existing regulations 
clearly fit within CATEX A3 because they are administrative in nature, 
do not have the potential to significantly affect the environment. are 
not a part of any larger Federal actions, and DHS is unaware of the 
existence of any extraordinary circumstances that create the potential 
for environmental effects. These amendments are administrative in 
nature, reflect current USCIS policy, and will not result in a change 
to the environmental impact of the regulation. The same is true with 
clarifications regarding the filing of amended petitions, deference 
policy, and rules regarding evidence of maintenance of status.
NEPA Final Rule Analysis
    DHS and its components analyzed the proposed actions to determine 
whether NEPA applies to them and, if so, what level of analysis is 
required. DHS Directive 023-01, Rev. 01 (Directive) and Instruction 
Manual 023-01-001-01, Rev. 01 (Instruction Manual) \227\ establish the 
procedures DHS and its components use to comply with NEPA and the 
Council on Environmental Quality (CEQ) regulations for implementing 
NEPA. See 40 CFR parts 1500 through 1508. The CEQ regulations allow 
Federal agencies to establish in their NEPA implementing procedures 
categories of actions (``categorical exclusions'') that experience has 
shown normally do not individually or cumulatively have a significant 
effect on the human environment and, therefore, do not require 
preparation of an Environmental Assessment or Environmental Impact 
Statement. See 40 CFR 1501.4(a). Instruction Manual, Appendix A, Table 
1 lists the DHS categorical exclusions.
---------------------------------------------------------------------------

    \227\ See DHS, ``Implementing the National Environmental Policy 
Act,'' DHS Directive 023-01, Rev 01 (Oct. 31, 2014), and DHS 
Instruction Manual Rev. 01 (Nov. 6, 2014), https://www.dhs.gov/publication/directive-023-01-rev-01-and-instruction-manual-023-01-001-01-rev-01-and-catex.
---------------------------------------------------------------------------

    Under DHS NEPA implementing procedures, for an action to be 
categorically excluded, it must satisfy each of the following three 
conditions: (1) the entire action clearly fits within one or more of 
the categorical exclusions; (2) the action is not a piece of a larger 
action; and (3) no extraordinary circumstances exist that create the 
potential for a significant environmental effect.\228\
---------------------------------------------------------------------------

    \228\ See Instruction Manual, section V.B.2 (a-c).
---------------------------------------------------------------------------

    As discussed throughout this preamble, this final rule amends 
existing regulations governing the H-1B program primarily to modernize 
and streamline those regulations, provide certain benefits and 
flexibilities to the regulated public, and improve program integrity. 
It therefore fits within CATEX A3 because the amendments are 
administrative and procedural in nature, are not a part of a larger 
Federal action and do not have the potential to significantly affect 
the environment. Finally, DHS is unaware of the existence of any 
extraordinary circumstances that would result in any environmental 
effects.

J. Paperwork Reduction Act

    Under the Paperwork Reduction Act of 1995 (PRA), Public Law 104-13, 
all agencies must submit to the OMB, for review and approval, any 
reporting requirements inherent in a rule, unless they are exempt.
    In compliance with the PRA, DHS published an NPRM on October 23, 
2023 (88 FR 72870), in which comments on the revisions to the 
information collections associated with this rulemaking were requested. 
Any comments received on information collections activities were 
related to the beneficiary-centric changes and documentation required 
for establishing unique beneficiary identification. DHS responded to 
those comments in section III. of this final rule. The information 
collection instruments that will be revised with this final rule are 
described below.
    Overview of Information Collections:
H-1B Registration Tool (OMB Control No. 1615-0144)
    (1) Type of Information Collection: Revision of a Currently 
Approved Collection.
    (2) Title of the Form/Collection: H-1B Registration Tool.
    (3) Agency form number, if any, and the applicable component of DHS 
sponsoring the collection: OMB-64; USCIS.
    (4) Affected public who will be asked or required to respond, as 
well as a brief abstract: Primary: Business or other for-profit. USCIS 
uses the data collected on this form to determine which employers will 
be informed that they may submit a USCIS Form I-129, Petition for 
Nonimmigrant Worker, for H-1B classification.
    (5) An estimate of the total number of respondents and the amount 
of time estimated for an average respondent to respond: The estimated 
total number of respondents for the information collection H-1B 
Registration Tool (Businesses) is 20,950 and the estimated hour burden 
per response is 0.6 hours. The estimated total number of respondents 
for the information collection H-1B Registration Tool (Attorneys) is 
19,339 and the estimated hour burden per response is 0.6 hours.

[[Page 103195]]

    (6) An estimate of the total public burden (in hours) associated 
with the collection: The total estimated annual hour burden associated 
with this collection of information is 213,354 hours.
    (7) An estimate of the total public burden (in cost) associated 
with the collection: The estimated total annual cost burden associated 
with this collection of information is $0.
Form I-129 (OMB Control No. 1615-0009)
    (1) Type of Information Collection: Revision of a Currently 
Approved Collection.
    (2) Title of the Form/Collection: Petition for a Nonimmigrant 
Worker.
    (3) Agency form number, if any, and the applicable component of the 
DHS sponsoring the collection: I-129; USCIS.
    (4) Affected public who will be asked or required to respond, as 
well as a brief abstract: Primary: Business or other for-profit. USCIS 
uses Form I-129 and accompanying supplements to determine whether the 
petitioner and beneficiary(ies) is (are) eligible for the nonimmigrant 
classification. A U.S. employer, or agent in some instances, may file a 
petition for nonimmigrant worker to employ foreign nationals under the 
following nonimmigrant classifications: H-1B, H-2A, H-2B, H-3, L-1, O-
1, O-2, P-1, P-2, P-3, P-1S, P-2S, P-3S, Q-1, or R-1 nonimmigrant 
worker. The collection of this information is also required from a U.S. 
employer on a petition for an extension of stay or change of status for 
E-1, E-2, E-3, Free Trade H-1B1 Chile/Singapore nonimmigrants and TN 
(USMCA workers) who are in the United States.
    (5) An estimate of the total number of respondents and the amount 
of time estimated for an average respondent to respond: \229\ The 
estimated total number of respondents for the information collection I-
129 (paper-filings) is 572,606 and the estimated hour burden per 
response is 2.55 hours; the estimated total number of respondents for 
the information collection I-129 (electronic-filings) is 45,000 and the 
estimated hour burden per response is 2.333 hours the estimated total 
number of respondents for the information collection E-1/E-2 
Classification Supplement to Form I-129 is 12,050 and the estimated 
hour burden per response is 0.67 hours; the estimated total number of 
respondents for the information collection Trade Agreement Supplement 
(paper-filings) to Form I-129 is 10,945 and the estimated hour burden 
per response is 0.67 hours; the estimated total number of respondents 
for the information collection Trade Agreement Supplement (electronic-
filings) to Form I-129 is 2,000 and the estimated hour burden per 
response is 0.5833 hours; the estimated total number of respondents for 
the information collection H Classification Supplement (paper-filings) 
to Form I-129 is 426,983 and the estimated hour burden per response is 
2.07 hours; the estimated total number of respondents for the 
information collection H Classification Supplement (electronic-filings) 
to Form I-129 is 45,000 and the estimated hour burden per response is 2 
hours; the estimated total number of respondents for the information 
collection H-1B and H-1B1 Data Collection and Filing Fee Exemption 
Supplement (paper-filings) is 353,936 and the estimated hour burden per 
response is 1 hour; the estimated total number of respondents for the 
information collection H-1B and H-1B1 Data Collection and Filing Fee 
Exemption Supplement (electronic-filings) is 45,000 and the estimated 
hour burden per response is .9167 hour; the estimated total number of 
respondents for the information collection L Classification Supplement 
to Form I-129 is 40,353 and the estimated hour burden per response is 
1.34 hours; the estimated total number of respondents for the 
information collection O and P Classifications Supplement to Form I-129 
is 28,434 and the estimated hour burden per response is 1 hour; the 
estimated total number of respondents for the information collection Q-
1 Classification Supplement to Form I-129 is 54 and the estimated hour 
burden per response is 0.34 hours; and the estimated total number of 
respondents for the information collection R-1 Classification 
Supplement to Form I-129 is 6,782 and the estimated hour burden per 
response is 2.34 hours.
---------------------------------------------------------------------------

    \229\ After the publication of the NPRM, DHS published the USCIS 
Fee Schedule Final Rule (``Fee Rule'') (89 FR 6194) on January 31, 
2024, and that rule went into effect on April 1, 2024. Subsequently, 
DHS updated the information collection, and the baseline estimated 
total number of respondents, and the amount of time estimated for an 
average respondent to respond, to reflect the changes to the 
information collection approved in connection with the Fee Rule. As 
a result, the estimated total public burden in hours and cost 
associated with the information collection has changed since the 
publication of the NPRM. USCIS Form I-129 (paper-filings) estimated 
time burden average per response is 2.487 hours (current) + .067 
hours (increase from the NPRM) = 2.55 hours. On April 1, 2024, DHS 
also began accepting online filing for H-1B cap petitions and since 
included the estimated total respondents and the estimated time 
burden average per response to account for electronic filing 
submissions since the publication of the NPRM.
---------------------------------------------------------------------------

    (6) An estimate of the total public burden (in hours) associated 
with the collection: The total estimated annual hour burden associated 
with this collection is 3,795,670 hours.
    (7) An estimate of the total public burden (in cost) associated 
with the collection: The estimated total annual cost burden associated 
with this collection of information is $294,892,090.

List of Subjects in 8 CFR Part 214

    Administrative practice and procedure, Aliens, Cultural exchange 
program, Employment, Foreign officials, Health professions, Reporting 
and recordkeeping requirements, Students.

    Accordingly, DHS amends chapter I of title 8 of the Code of Federal 
Regulations as follows:

PART 214--NONIMMIGRANT CLASSES

0
1. The authority citation for part 214 continues to read as follows:

    Authority:  6 U.S.C. 202, 236; 8 U.S.C. 1101, 1102, 1103, 1182, 
1184, 1186a, 1187, 1221, 1281, 1282, 1301-1305, 1357, and 1372; sec. 
643, Pub. L. 104-208, 110 Stat. 3009-708; Pub. L. 106-386, 114 Stat. 
1477-1480; section 141 of the Compacts of Free Association with the 
Federated States of Micronesia and the Republic of the Marshall 
Islands, and with the Government of Palau, 48 U.S.C. 1901 note and 
1931 note, respectively; 48 U.S.C. 1806; 8 CFR part 2; Pub. L. 115-
218, 132 Stat. 1547 (48 U.S.C. 1806).


0
2. Amend Sec.  214.1 by:
0
a. Revising paragraphs (c)(1) and (4);
0
b. Redesignating paragraph (c)(5) as paragraph (c)(7);
0
c. Adding a new paragraph (c)(5) and paragraph (c)(6); and
0
d. Revising newly redesignated paragraph (c)(7).
    The revisions and additions read as follows:


Sec.  214.1  Requirements for admission, extension, and maintenance of 
status.

* * * * *
    (c) * * *
    (1) Extension or amendment of stay for certain employment-based 
nonimmigrant workers. An applicant or petitioner seeking the services 
of an E-1, E-2, E-3, H-1B, H-1B1, H-2A, H-2B, H-3, L-1, O-1, O-2, P-1, 
P-2, P-3, P-1S, P-2S, P-3S, Q-1, R-1, or TN nonimmigrant beyond the 
period previously granted, or seeking to amend the terms and conditions 
of the nonimmigrant's stay without a request for additional time, must 
file for an extension of stay or amendment of stay, on Form I-129, with 
the fee prescribed in 8 CFR 106.2, with the initial evidence specified 
in Sec.  214.2, and in accordance

[[Page 103196]]

with the form instructions. Dependents holding derivative status may be 
included in the petition if it is for only one worker and the form 
version specifically provides for their inclusion. In all other cases, 
dependents of the worker should file extensions of stay using Form I-
539.
* * * * *
    (4) Timely filing and maintenance of status. (i) An extension or 
amendment of stay may not be approved for an applicant or beneficiary 
who failed to maintain the previously accorded status or where such 
status expired before the application or petition was filed, except 
that USCIS may excuse the late filing in its discretion where it is 
demonstrated at the time of filing that:
    (A) The delay was due to extraordinary circumstances beyond the 
control of the applicant or petitioner, and USCIS finds the delay 
commensurate with the circumstances;
    (B) The applicant or beneficiary has not otherwise violated their 
nonimmigrant status;
    (C) The applicant or beneficiary remains a bona fide nonimmigrant; 
and
    (D) The applicant or beneficiary is not the subject of deportation 
proceedings under section 242 of the Act (prior to April 1, 1997) or 
removal proceedings under section 240 of the Act.
    (ii) If USCIS excuses the late filing of an extension of stay or 
amendment of stay request, it will do so without requiring the filing 
of a separate application or petition and will grant the extension of 
stay from the date the previously authorized stay expired, or the 
amendment of stay from the date the petition was filed.
    (5) Deference to prior USCIS determinations of eligibility. When 
adjudicating a request filed on Form I-129 involving the same parties 
and the same underlying facts, USCIS gives deference to its prior 
determination of the petitioner's, applicant's, or beneficiary's 
eligibility. However, USCIS need not give deference to a prior approval 
if: there was a material error involved with a prior approval; there 
has been a material change in circumstances or eligibility 
requirements; or there is new, material information that adversely 
impacts the petitioner's, applicant's, or beneficiary's eligibility.
    (6) Evidence of maintenance of status. When requesting an extension 
or amendment of stay on Form I-129, an applicant or petitioner must 
submit supporting evidence to establish that the applicant or 
beneficiary maintained the previously accorded nonimmigrant status 
before the extension or amendment request was filed. Evidence of such 
maintenance of status may include, but is not limited to: copies of 
paystubs, W-2 forms, quarterly wage reports, tax returns, contracts, 
and work orders.
    (7) Decision on extension or amendment of stay request. Where an 
applicant or petitioner demonstrates eligibility for a requested 
extension or amendment of stay, USCIS may grant the extension or 
amendment in its discretion. The denial of an extension or amendment of 
stay request may not be appealed.
* * * * *

0
3. Amend Sec.  214.2 by:
0
a. Revising paragraph (f)(5)(vi)(A);
0
b. Removing and reserving paragraph (h)(2)(i)(B);
0
c. Revising paragraphs (h)(2)(i)(E) and (F) and (h)(4)(i)(B);
0
d. Revising the definitions of ``Specialty occupation'' and ``United 
States employer'' in paragraph (h)(4)(ii);
0
e. Revising the heading for paragraph (h)(4)(iii) and paragraph 
(h)(4)(iii)(A);
0
f. Adding paragraph (h)(4)(iii)(F);
0
g. Revising paragraph (h)(4)(iv) introductory text;
0
h. Adding paragraph (h)(4)(iv)(C);
0
i. Revising paragraphs (h)(8)(iii)(F)(2)(iv), (h)(8)(iii)(F)(4), and 
(h)(9)(i);
0
j. Adding paragraphs (h)(9)(ii)(D) and (h)(9)(iii)(E);
0
k. Revising paragraph (h)(11)(ii);
0
l. Removing the period at the end of paragraph (h)(11)(iii)(A)(6) and 
adding ``; or'' in its place;
0
m. Adding paragraph (h)(11)(iii)(A)(7);
0
n. Revising paragraphs (h)(14), (h)(19)(iii)(B)(4), (h)(19)(iii)(C), 
and (h)(19)(iv);
0
o. Adding paragraph (h)(33); and
0
p. Revising paragraphs (l)(14)(i), (o)(11), and (p)(13).
    The revisions and additions read as follows:


Sec.  214.2  Special requirements for admission, extension, and 
maintenance of status.

* * * * *
    (f) * * *
    (5) * * *
    (vi) * * *
    (A) The duration of status, and any employment authorization 
granted under 8 CFR 274a.12(c)(3)(i)(B) or (C), of an F-1 student who 
is the beneficiary of an H-1B petition subject to section 214(g)(1)(A) 
of the Act (8 U.S.C. 1184(g)(1)(A)) requesting a change of status will 
be automatically extended until April 1 of the fiscal year for which 
such H-1B status is being requested or until the validity start date of 
the approved petition, whichever is earlier, where such petition:
    (1) Has been timely filed;
    (2) Requests an H-1B employment start date in the fiscal year for 
which such H-1B status is being requested consistent with paragraph 
(h)(2)(i)(I) of this section; and
    (3) Is nonfrivolous.
* * * * *
    (h) * * *
    (2) * * *
    (i) * * *
    (E) Amended or new petition--(1) General provisions. The petitioner 
must file an amended or new petition, with the appropriate fee and in 
accordance with the form instructions, to reflect any material changes 
in the terms and conditions of employment or training or the 
beneficiary's eligibility as specified in the original approved 
petition. An amended or new H-1B, H-2A, or H-2B petition must be 
accompanied by a current or new Department of Labor determination. In 
the case of an H-1B petition, this requirement includes a current or 
new certified labor condition application.
    (2) Additional H-1B provisions. The amended or new petition must be 
properly filed before the material change(s) takes place. The 
beneficiary is not authorized to work under the materially changed 
terms and conditions of employment until the new or amended H-1B 
petition is approved and takes effect, unless the beneficiary is 
eligible for H-1B portability pursuant to paragraph (h)(2)(i)(H) of 
this section. Any change in the place of employment to a geographical 
area that requires a corresponding labor condition application to be 
certified to USCIS is considered a material change and requires an 
amended or new petition to be filed with USCIS before the H-1B worker 
may begin work at the new place of employment. Provided there are no 
material changes in the terms and conditions of the H-1B worker's 
employment, a petitioner does not need to file an amended or new 
petition when:
    (i) Moving a beneficiary to a new job location within the same area 
of intended employment as listed on the labor condition application 
certified to USCIS in support of the current H-1B petition approval 
authorizing the H-1B nonimmigrant's employment.
    (ii) Placing a beneficiary at a short-term placements(s) or 
assignment(s) at any worksite(s) outside of the area of intended 
employment for a total of 30 days or less in a 1-year period, or for a 
total of 60 days or less in a 1-year period where the H-1B beneficiary 
continues to maintain an office or work station at their permanent 
worksite, the

[[Page 103197]]

beneficiary spends a substantial amount of time at the permanent 
worksite in a 1-year period, and the beneficiary's residence is located 
in the area of the permanent worksite and not in the area of the short-
term worksite(s); or
    (iii) An H-1B beneficiary is going to a non-worksite location to 
participate in employee development, will be spending little time at 
any one location, or when the job is peripatetic in nature, in that the 
normal duties of the beneficiary's occupation (rather than the nature 
of the employer's business) requires frequent travel (local or non-
local) from location to location. Peripatetic jobs include situations 
where the job is primarily at one location, but the beneficiary 
occasionally travels for short periods to other locations on a casual, 
short-term basis, which can be recurring but not excessive (i.e., not 
exceeding 5 consecutive workdays for any one visit by a peripatetic 
worker, or 10 consecutive workdays for any one visit by a worker who 
spends most work time at one location and travels occasionally to other 
locations).
    (F) Agents as petitioners. A United States agent may file a 
petition in cases involving workers who are traditionally self-employed 
or workers who use agents to arrange short-term employment on their 
behalf with numerous employers, and in cases where a foreign employer 
authorizes the agent to act on its behalf. A United States agent may 
be: the actual employer of the beneficiary; the representative of both 
the employer and the beneficiary; or a person or entity authorized by 
the employer to act for, or in place of, the employer as its agent. The 
burden is on the agent to explain the terms and conditions of the 
employment and to provide any required documentation. In questionable 
cases, a contract between the employers and the beneficiary or 
beneficiaries may be required.
    (1) An agent performing the function of an employer must guarantee 
the wages and other terms and conditions of employment by contractual 
agreement with the beneficiary or beneficiaries of the petition.
    (2) A foreign employer who, through a United States agent, files a 
petition for an H nonimmigrant alien is responsible for complying with 
all of the employer sanctions provisions of section 274A of the Act and 
8 CFR part 274a.
* * * * *
    (4) * * *
    (i) * * *
    (B) General requirements for petitions involving a specialty 
occupation--(1) Labor condition application requirements. (i) Before 
filing a petition for H-1B classification in a specialty occupation, 
the petitioner must obtain a certified labor condition application from 
the Department of Labor in the occupational specialty in which the 
alien(s) will be employed.
    (ii) Certification by the Department of Labor of a labor condition 
application in an occupational classification does not constitute a 
determination by the agency that the occupation in question is a 
specialty occupation. USCIS will determine whether the labor condition 
application involves a specialty occupation as defined in section 
214(i)(1) of the Act and properly corresponds with the petition. USCIS 
will also determine whether all other eligibility requirements have 
been met, such as whether the alien for whom H-1B classification is 
sought qualifies to perform services in the specialty occupation as 
prescribed in section 214(i)(2) of the Act.
    (iii) If all of the beneficiaries covered by an H-1B labor 
condition application have not been identified at the time a petition 
is filed, petitions for newly identified beneficiaries may be filed at 
any time during the validity of the labor condition application using 
copies of the same certified labor condition application. Each petition 
must refer by file number to all previously approved petitions for that 
labor condition application.
    (iv) When petitions have been approved for the total number of 
workers specified in the labor condition application, substitution of 
aliens against previously approved openings cannot be made. A new labor 
condition application will be required.
    (v) If the Secretary of Labor notifies USCIS that the petitioning 
employer has failed to meet a condition of paragraph (B) of section 
212(n)(1) of the Act, has substantially failed to meet a condition of 
paragraphs (C) or (D) of section 212(n)(1) of the Act, has willfully 
failed to meet a condition of paragraph (A) of section 212(n)(1) of the 
Act, or has misrepresented any material fact in the application, USCIS 
will not approve petitions filed with respect to that employer under 
section 204 or 214(c) of the Act for a period of at least 1 year from 
the date of receipt of such notice.
    (vi) If the employer's labor condition application is suspended or 
invalidated by the Department of Labor, USCIS will not suspend or 
revoke the employer's approved petitions for aliens already employed in 
specialty occupations if the employer has certified to the Department 
of Labor that it will comply with the terms of the labor condition 
application for the duration of the authorized stay of aliens it 
employs.
    (2) Inspections, evaluations, verifications, and compliance 
reviews. (i) The information provided on an H-1B petition and the 
evidence submitted in support of such petition may be verified by USCIS 
through lawful means as determined by USCIS, including telephonic and 
electronic verifications and on-site inspections. Such verifications 
and inspections may include, but are not limited to: electronic 
validation of a petitioner's or third party's basic business 
information; visits to the petitioner's or third party's facilities; 
interviews with the petitioner's or third party's officials; reviews of 
the petitioner's or third party's records related to compliance with 
immigration laws and regulations; and interviews with any other 
individuals possessing pertinent information, as determined by USCIS, 
which may be conducted in the absence of the employer or the employer's 
representatives; and reviews of any other records that USCIS may 
lawfully obtain and that it considers pertinent to verify facts related 
to the adjudication of the H-1B petition, such as facts relating to the 
petitioner's and beneficiary's H-1B eligibility and compliance. The 
interviews may be conducted on the employer's property, or as feasible, 
at a neutral location agreed to by the interviewee and USCIS away from 
the employer's property. An inspection may be conducted at locations 
including the petitioner's headquarters, satellite locations, or the 
location where the beneficiary works, has worked, or will work, 
including third party worksites, as applicable. USCIS may commence 
verification or inspection under this paragraph (h)(4)(i)(B)(2) for any 
petition and at any time after an H-1B petition is filed, including any 
time before or after the final adjudication of the petition. The 
commencement of such verification and inspection before the final 
adjudication of the petition does not preclude the ability of USCIS to 
complete final adjudication of the petition before the verification and 
inspection are completed.
    (ii) USCIS conducts on-site inspections or other compliance reviews 
to verify facts related to the adjudication of the petition and 
compliance with H-1B petition requirements. If USCIS is unable to 
verify facts, including due to the failure or refusal of the petitioner 
or a third party to cooperate in an inspection or other compliance 
review, then such inability to verify facts, including due to failure 
or refusal to cooperate, may result in denial or revocation of any H-1B 
petition for H-

[[Page 103198]]

1B workers performing services at the location or locations that are a 
subject of inspection or compliance review, including any third party 
worksites.
    (3) Third party requirements. If the beneficiary will be staffed to 
a third party, meaning they will be contracted to fill a position in a 
third party's organization and becomes part of that third party's 
organizational hierarchy by filling a position in that hierarchy (and 
not merely providing services to the third party), the actual work to 
be performed by the beneficiary must be in a specialty occupation. When 
staffed to a third party, it is the requirements of that third party, 
and not the petitioner, that are most relevant when determining whether 
the position is a specialty occupation.
* * * * *
    (ii) * * *
    Specialty occupation means 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 directly related specific specialty, or its equivalent, 
as a minimum for entry into the occupation in the United States. A 
position is not a specialty occupation if attainment of a general 
degree, without further specialization, is sufficient to qualify for 
the position. A position may allow for a range of qualifying degree 
fields, provided that each of those fields is directly related to the 
duties of the position. Directly related means there is a logical 
connection between the required degree, or its equivalent, and the 
duties of the position.
    United States employer means a person, firm, corporation, 
contractor, or other association, or organization in the United States 
that:
    (1) Has a bona fide job offer for the beneficiary to work within 
the United States, which may include telework, remote work, or other 
off-site work within the United States;
    (2) Has a legal presence in the United States and is amenable to 
service of process in the United States; and
    (3) Has an Internal Revenue Service Tax identification number.
    (4) If the H-1B beneficiary possesses a controlling interest in the 
petitioner, meaning the beneficiary owns more than 50 percent of the 
petitioner or has majority voting rights in the petitioner, such a 
beneficiary may perform duties that are directly related to owning and 
directing the petitioner's business as long as the beneficiary will 
perform specialty occupation duties a majority of the time, consistent 
with the terms of the H-1B petition.
    (iii) General H-1B requirements--(A) Criteria for specialty 
occupation position. A position does not meet the definition of 
specialty occupation in paragraph (h)(4)(ii) of this section unless it 
also satisfies at least one of the following criteria at paragraphs 
(h)(4)(iii)(A)(1) through (4) of this section:
    (1) A U.S. baccalaureate or higher degree in a directly related 
specific specialty, or its equivalent, is normally the minimum 
requirement for entry into the particular occupation;
    (2) A U.S. baccalaureate or higher degree in a directly related 
specific specialty, or its equivalent, is normally required to perform 
job duties in parallel positions among similar organizations in the 
employer's industry in the United States;
    (3) The employer, or third party if the beneficiary will be staffed 
to that third party, normally requires a U.S. baccalaureate or higher 
degree in a directly related specific specialty, or its equivalent, to 
perform the job duties of the position; or
    (4) The specific duties of the proffered position are so 
specialized, complex, or unique that the knowledge required to perform 
them is normally associated with the attainment of a U.S. baccalaureate 
or higher degree in a directly related specific specialty, or its 
equivalent.
    (5) For purposes of the criteria at paragraphs (h)(4)(iii)(A)(1) 
through (4) of this section, normally means conforming to a type, 
standard, or regular pattern, and is characterized by that which is 
considered usual, typical, common, or routine. Normally does not mean 
always.
* * * * *
    (F) Bona fide position in a specialty occupation. At the time of 
filing, the petitioner must establish that it has a bona fide position 
in a specialty occupation available for the beneficiary as of the start 
date of the validity period as requested on the petition. A petitioner 
is not required to establish specific day-to-day assignments for the 
entire time requested in the petition.
* * * * *
    (iv) General documentary requirements for H-1B classification in a 
specialty occupation. Except as specified in paragraph (h)(4)(iv)(C) of 
this section, an H-1B petition involving a specialty occupation must be 
accompanied by:
* * * * *
    (C) In accordance with 8 CFR 103.2(b) and paragraph (h)(9) of this 
section, USCIS may request evidence such as contracts, work orders, or 
other similar evidence between all parties in a contractual 
relationship showing the bona fide nature of the beneficiary's position 
and the minimum educational requirements to perform the duties.
* * * * *
    (8) * * *
    (iii) * * *
    (F) * * *
    (2) * * *
    (iv) The nonprofit entity has entered into a formal written 
affiliation agreement with an institution of higher education that 
establishes an active working relationship between the nonprofit entity 
and the institution of higher education for the purposes of research or 
education, and a fundamental activity of the nonprofit entity is to 
directly contribute to the research or education mission of the 
institution of higher education. A nonprofit entity may engage in more 
than one fundamental activity.
* * * * *
    (4) An H-1B beneficiary who is not directly employed by a 
qualifying institution, organization, or entity identified in section 
214(g)(5)(A) or (B) of the Act will qualify for an exemption under such 
section if the H-1B beneficiary will spend at least half of their work 
time performing job duties at a qualifying institution, organization, 
or entity and those job duties directly further an activity that 
supports or advances one of the fundamental purposes, missions, 
objectives, or functions of the qualifying institution, organization, 
or entity, namely, either higher education, nonprofit research, or 
government research. Work performed ``at'' the qualifying institution 
may include work performed in the United States through telework, 
remote work, or other off-site work. When considering whether a 
position is cap-exempt, USCIS will focus on the job duties to be 
performed, rather than where the duties are physically performed.
* * * * *
    (9) * * *
    (i) Approval. (A) USCIS will consider all the evidence submitted 
and any other evidence independently required to assist in 
adjudication. USCIS will notify the petitioner of the approval of the 
petition on a Notice of Action. The approval notice will include the 
beneficiary's (or beneficiaries') name(s) and classification and the 
petition's

[[Page 103199]]

period of validity. A petition for more than one beneficiary and/or 
multiple services may be approved in whole or in part. The approval 
notice will cover only those beneficiaries approved for classification 
under section 101(a)(15)(H) of the Act.
    (B) Where an H-1B petition is approved for less time than requested 
on the petition, the approval notice will provide or be accompanied by 
a brief explanation for the validity period granted.
    (ii) * * *
    (D)(1) If an H-1B petition is adjudicated and deemed approvable 
after the initially requested validity period end-date or end-date for 
which eligibility is established, the officer may issue a request for 
evidence (RFE) asking the petitioner whether they want to update the 
requested dates of employment. Factors that inform whether USCIS issues 
an RFE could include, but would not be limited to: additional petitions 
filed or approved on the beneficiary's behalf, or the beneficiary's 
eligibility for additional time in H-1B status. If the new requested 
period exceeds the validity period of the labor condition application 
already submitted with the H-1B petition, the petitioner must submit a 
certified labor condition application with a new validity period that 
properly corresponds to the new requested validity period on the 
petition and an updated prevailing or proffered wage, if applicable, 
except that the petitioner may not reduce the proffered wage from that 
originally indicated in their petition. This labor condition 
application may be certified after the date the H-1B petition was filed 
with USCIS. The request for new dates of employment and submission of a 
labor condition application corresponding with the new dates of 
employment, absent other changes, will not be considered a material 
change. An increase to the proffered wage will not be considered a 
material change, as long as there are no other material changes to the 
position.
    (2) If USCIS does not issue an RFE concerning the requested dates 
of employment, if the petitioner does not respond, or the RFE response 
does not support new dates of employment, the petition will be 
approved, if otherwise approvable, for the originally requested period 
or until the end-date eligibility has been established, as appropriate. 
However, the petition will not be forwarded to the Department of State 
nor will any accompanying request for a change of status, an extension 
of stay, or amendment of stay, be granted.
    (iii) * * *
    (E) H-1B petition for certain beneficiary-owned entities. The 
initial approval of a petition filed by a United States employer in 
which the H-1B beneficiary possesses a controlling interest in the 
petitioning organization or entity, meaning the beneficiary owns more 
than 50 percent of the petitioner or has majority voting rights in the 
petitioner, will be limited to a validity period of up to 18 months. 
The first extension (including an amended petition with a request for 
an extension of stay) of such a petition will also be limited to a 
validity period of up to 18 months.
* * * * *
    (11) * * *
    (ii) Immediate and automatic revocation. The approval of any 
petition is immediately and automatically revoked if the petitioner 
goes out of business, files a written withdrawal of the petition, or 
the Department of Labor revokes the labor certification upon which the 
petition is based. The approval of an H-1B petition is also immediately 
and automatically revoked upon notification from the H-1B petitioner 
that the beneficiary is no longer employed.
    (iii) * * *
    (A) * * *
    (7) The petitioner failed to timely file an amended petition 
notifying USCIS of a material change or otherwise failed to comply with 
the material change reporting requirements in paragraph (h)(2)(i)(E) of 
this section.
* * * * *
    (14) Extension of visa petition validity. The petitioner must file 
a request for a petition extension on the Form I-129 to extend the 
validity of the original petition under section 101(a)(15)(H) of the 
Act. A request for a petition extension generally may be filed only if 
the validity of the original petition has not expired.
* * * * *
    (19) * * *
    (iii) * * *
    (B) * * *
    (4) The nonprofit entity has entered into a formal written 
affiliation agreement with an institution of higher education that 
establishes an active working relationship between the nonprofit entity 
and the institution of higher education for the purposes of research or 
education, and a fundamental activity of the nonprofit entity is to 
directly contribute to the research or education mission of the 
institution of higher education. A nonprofit entity may engage in more 
than one fundamental activity;
    (C) A nonprofit research organization or government research 
organization. When a fundamental activity of a nonprofit organization 
is engaging in basic research and/or applied research, that 
organization is a nonprofit research organization. When a fundamental 
activity of a governmental organization is the performance or promotion 
of basic research and/or applied research, that organization is a 
government research organization. A governmental research organization 
may be a Federal, State, or local entity. A nonprofit research 
organization or governmental research organization may perform or 
promote more than one fundamental activity. Basic research is general 
research to gain more comprehensive knowledge or understanding of the 
subject under study, without specific applications in mind. Basic 
research is also research that advances scientific knowledge but does 
not have specific immediate commercial objectives although it may be in 
fields of present or potential commercial interest. Applied research is 
research to gain knowledge or understanding to determine the means by 
which a specific, recognized need may be met. Applied research includes 
investigations oriented to discovering new scientific knowledge that 
has specific commercial objectives with respect to products, processes, 
or services. Both basic research and applied research may include 
research and investigation in the sciences, social sciences, or 
humanities and may include designing, analyzing, and directing the 
research of others if on an ongoing basis and throughout the research 
cycle;
* * * * *
    (iv) Nonprofit or tax exempt organizations. For purposes of 
paragraphs (h)(19)(iii)(B) and (C) of this section, a nonprofit 
organization or entity must be determined by the Internal Revenue 
Service to be a tax exempt organization under the Internal Revenue Code 
of 1986, section 501(c)(3), (c)(4), or (c)(6), 26 U.S.C. 501(c)(3), 
(c)(4), or (c)(6).
* * * * *
    (33) Severability. The Department intends that should any of the 
revisions effective on January 17, 2025, to provisions in paragraphs 
(f)(5), (h)(2), (4) through (6), (8), (9), (11), (14), and (19), 
(l)(14), (o)(11), and (p)(13) of this section or to the provisions in 8 
CFR 214.1(c)(1) and (4) through (7) be held to be invalid or 
unenforceable by their terms or as applied to any person or 
circumstance they should nevertheless be construed so as to continue to 
give the maximum effect to the provision(s) permitted by law, unless 
any such provision is held to be wholly invalid

[[Page 103200]]

and unenforceable, in which event the provision(s) should be severed 
from the remainder of the provisions and the holding should not affect 
the other provisions or the application of those other provisions to 
persons not similarly situated or to dissimilar circumstances.
* * * * *
    (l) * * *
    (14) * * *
    (i) Individual petition. The petitioner must file a petition 
extension on Form I-129 to extend an individual petition under section 
101(a)(15)(L) of the Act. A petition extension generally may be filed 
only if the validity of the original petition has not expired.
* * * * *
    (o) * * *
    (11) Extension of visa petition validity. The petitioner must file 
a request to extend the validity of the original petition under section 
101(a)(15)(O) of the Act on the form prescribed by USCIS, in order to 
continue or complete the same activities or events specified in the 
original petition. A petition extension generally may be filed only if 
the validity of the original petition has not expired.
* * * * *
    (p) * * *
    (13) Extension of visa petition validity. The petitioner must file 
a request to extend the validity of the original petition under section 
101(a)(15)(P) of the Act on the form prescribed by USCIS in order to 
continue or complete the same activity or event specified in the 
original petition. A petition extension generally may be filed only if 
the validity of the original petition has not expired.
* * * * *

Alejandro N. Mayorkas,
Secretary, U.S. Department of Homeland Security.
[FR Doc. 2024-29354 Filed 12-17-24; 8:45 am]
 BILLING CODE 9111-97-P`