The Department of Homeland Security (DHS) has updated the regulations for H-1B entitlement, effective January 17, 2025. The new “H-1B Modernization Rule” includes several provisions aimed at clarifying requirements, providing greater flexibility and improving the integrity of the H-1B program.
Some changes are minor, such as clarifying the definition of a “specialty occupation” for H-1B employment. Other changes affect the evidence required for petitions, and related programs such as F-1 visas for students. See the US Federal Register for a full summary and description of the new rule. Below we highlight a few of the more important changes.
Company Owners as H-1B Beneficiaries
Possibly the biggest change for some H-1B beneficiaries is the potential for owners of a company to file a petition for themselves as the beneficiary. That is, if an individual sets up a valid company with a US presence and IRS Tax Identification number, the company may submit a petition on behalf of the beneficiary who owns the company—or a significant portion of it.
This may seem to create a loophole—i.e., allowing a person to set up a company just to become eligible for an H-1B visa. But it’s not that simple or easy, and DHS has included significant “guardrails” to prevent fraud while still encouraging entrepreneurs and job creators to pursue H-1B entitlement.
Specifically, to qualify as an H-1B “beneficiary-owner,” the person must be employed in a “bona fide” job which meets the requirements for an H-1B specialty occupation. Further, the beneficiary must spend the majority of their time in the specialty occupation role. This would likely be difficult for someone who sets up a company for themself only—with no supporting employees, as they would also have to run the company and perform non-qualifying duties such as administrative and other work. Also, DHS will limit these “beneficiary-owner” H-1B petitions to 18 months, instead of the typical 3 years.
Entrepreneurs who are considering the idea of establishing a company in the U.S. and applying for an H-1B visa as a “beneficiary-owner” should definitely consult with a knowledgeable immigration attorney to avoid pitfalls and help navigate this pathway to US employment under the H-1B program.
Other Changes
Several other notable changes to H-1B regulations are worth mentioning:
For students with an F-1 visa who apply for an H-1B, their F-1 will now extend automatically until Apr. 1 of the next year. This extends “Cap-gap” entitlement, which is currently until Oct. 1 of the calendar year in which they apply. The new rule allows students to maintain their status and employment eligibility if their H-1B petition is still pending beyond Oct. 1.
Program integrity changes: These changes mainly codify and clarify DHS’ authority to make site visits, and request contracts and other evidence. The new rule also clarifies that if a beneficiary will be staffed by a third party, the requirements and duties specified by the third party—and not the petitioner—will be most relevant in determining if the role is an H-1B specialty occupation. These integrity-related changes appear to be aimed at IT consulting and contracting companies who make up a significant part of the H-1B program.
As noted above, the new rule also clarifies the definition of “specialty occupation” for H-1B petitions, emphasizing that a range of qualifying degree fields are acceptable, as long as the degree relates to the job duties. Finally, the new rule grants more flexibility to nonprofit and governmental research organizations regarding petitions which are exempt from the H-1B cap.
In all, there are around 20 distinct changes to H-1B regulations. Therefore, when considering an H-1B petition, it is always wise to consult with an attorney or advocate who is experienced in working with immigration benefits and understands the nuances of the H-1B program.
John Walasik is a legal writer at SWLG, P.C. and Barbara Wong-Wilson is an attorney at Mission Law & Advocacy, P.C. and SWLG P.C. If you have any questions on U.S. immigration matters, email wo**@mi*********.com or wo**@sw****.com
