DHS Proposes Changes to H1-B Program

On October 23, 2023, the Department of Homeland Security released the Notice of Proposed Rule Making to amend H1-B regulations. The proposed rule aims to streamline the H1-B requirements, improve benefits and flexibility for both employers and workers, and strengthen H1-B integrity measures. There is a 60-day period for public comments, with the final rule anticipated to be published in early 2024. 

The proposed rule has 94 pages, and we summarize the key points as follows: 

1. Definition of “Specialty Occupation”

The proposed rule redefines the term “specialty occupation” which is the standard used to determine if a position qualifies for H-1B sponsorship. The current regulation requires “the attainment of a bachelor’s degree or higher in a specific specialty.” This phrasing has been narrowly interpreted in some cases and created challenges in sponsoring H1-B visa for some contemporary, modern positions, which in practice may engage candidates from different academic fields. 

The proposed rule codifies the existing practice that a range of degree fields may qualify an individual for a specialty occupation, though employers must establish a direct relationship between the required degree field and the job duties. 

The proposed rule also clarifies that a position would not qualify as an H1-B specialty occupation if it only requires a general degree without further specialization, for example, a degree in business administration or liberal arts degree. Another example is a software developer position requiring a degree in any field of engineering as it does not require application of highly specialized knowledge or a degree in specialty field. 

The current regulation states that a bachelor’s degree is “normally” required for the position. In practice, USCIS sometimes takes the position that “normally” means “always” and then issues RFE and denies petitions accordingly. The proposed rule clarifies that a bachelor’s degree is normally required for the position does not mean that a bachelor’s degree is always required. 

2. H1-B Eligibility for Entrepreneurs

The proposed rule allows a foreign entrepreneur to be eligible for the H1-B visa and be sponsored by the company he or she owns. In addition, the foreign owner (beneficiary) who has a controlling interest in the company that petitions for H1-B status “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 authorized under the petition a majority of the time.”

The validity period of an initial H1-B status and the first extension of such status for a beneficiary-entrepreneur will be limited to eighteen months instead of the standard three years allowed for other H1-B beneficiaries. 

3. H1-B Amendment Due to Change of Worksite

Currently, an H1-B amendment must be filed if there is a material change in the terms of H1-B employment, including change of job duties, change of work location, change of work hours, and other changes that impact H1-B employment conditions.

The proposed rule clarifies that a change of work location within the Metropolitan Statistical Area (MSA) would not require the filing of an amended petition, as the MSA is generally considered the area within “normal commuting distance” from the original worksite. A change of work location outside of the MSA would require the filing of an amended petition, with a new Labor Condition Application (LCA) that includes the new work location. 

4. Deference

The proposed rule codifies the existing practice of giving deference to prior petition approvals if there has been no material change in the underlying facts of the prior petition. This provision applies to petitions for all nonimmigrant classifications filed on Form I-129, including H, E, L, O and TN nonimmigrants. The deference policy will give employers more certainty when extending status for their employees with a nonimmigrant status. 

5. H1-B Lottery Integrity 

The proposed rule seeks to address H1-B cap registration abuse by changing the way of H1-B selection process (lottery), that is, beneficiaries with multiple registrations would only be counted once for selection purposes. Each beneficiary would be entered into the selection process once, regardless of how many registrations were submitted on his or her behalf.

The proposed rule codifies the existing practice that related entities (i.e., a parent company, subsidiary, or affiliate) are not allowed to file multiple petitions for the same beneficiary. The proposed rule also seeks to codify USCIS’ authority to deny or revoke an H1-B petition if the underlying registration contains a false attestation or is otherwise invalid. To this end, the proposed rule allows USCIS to require proof of an employment contract, work order, or other proof of a bona fide job offer to support an H-1B petition filing. 

6. Inspection by USCIS

The proposed rule codifies the USCIS’ existing authority to conduct public inspections to maintain the integrity of the H1-B program. Failure to comply with USCIS’ inspection request by an employer will trigger denial or revocation of the petition. Public inspections include onsite visits, interviews with officers and employees of the petitioner, review of employment records or any records USCIS deems relevant. Inspections may occur at the petitioner’s headquarters, satellite offices, or any location where the beneficiary will work, including the beneficiary’s home or third-party worksites. 

7. Third Party Placement 

The proposed rule clarifies that if an H1-B worker will be placed at a third-party organization, USCIS will consider the requirements of that third party, and not the petitioner, to determine whether the position qualifies for a specialty occupation. This is different from the current practice where the petitioning employer’s job requirements determine if the position qualifies for a specialty occupation.

8. Extension of H1-B “Cap-Gap” Eligibility 

The current cap-gap practice permits an automatic extension of F1 OPT status through September 30 of the same calendar year if an H1-B petition is filed on behalf of a beneficiary who has a valid, unexpired OPT on the day the petition is filed. This may cause problems if USCIS processing delays. The proposed rule extends the F1 OPT status through April 1 of the following calendar year, or until the valid start date of the approved H1-B petition, whichever is earlier.

9. Expansion of H1-B Quota Exemptions 

The proposed rule seeks to replace “primarily engaged” and “primary mission” with “fundamental activity.” This will allow a nonprofit entity or governmental research organization to be exempt from the H-1B quota if they conduct research as a “fundamental activity,” even if it is not the organization’s primary purpose or the organization has more than one “fundamental activity.” 

The proposed rule eliminates the requirement that the petitioner must show a direct correlation between the beneficiary’s duties and the essential purpose, mission, or objectives of the qualifying cap-exempt organization. For example, an individual working as an accountant or a software engineer for a university may now qualify for an H1-B cap exemption. 



The proposed rule seeks to amend the definition of “nonprofit or tax exempt organizations” and remove the requirement of providing an IRS letter showing the petitioner has been exempted from tax “for research or educational purposes.” The petition still needs to provide evidence that it meets the requirement, but not necessarily be in the form of an IRS letter.