White House Announces Major Changes to H-1B Nonimmigrant Visa Program

On October 6, 2020, the Trump administration announced an expected, but significant, overhaul of the H-1B nonimmigrant visa program for “specialty occupations” in the US, as well as significantly impacting related issues for E-3, H-1B1, and PERM immigration processes and filings.

These significant policy changes, to be published in the Federal Register on October 8, 2020, have been expected since 2017 when President Trump first announced intentions to revamp the H-1B program. Furthermore, many of these new policy changes have been implemented in practice already through ever-increasing scrutiny and internal adjudication procedures by US Citizenship & Immigration Services (USCIS), the US Department of State (DOS), and the US Department of Labor (DOL). 

More specifically, from 2015 to 2020, the H-1B petition denial rate went from 6% to 29%. During a news conference on Tuesday, October 6, 2020, Mr. Ken Cuccinelli, *Acting* Director of USCIS, stated that he expects the new interim final rules to result in one-third of H-1B visa petitions being rejected or denied. 

The H-1B nonimmigrant visa category is popular and permits employers to petition for highly educated foreign professionals to work in “specialty occupations” that require at least a bachelor’s degree in a related field or the equivalent thereof. Over the past few decades, the H-1B program has become integral to retaining foreign graduates of US colleges and universities, especially beneficiaries with degrees in science, technology, engineering, and mathematics (STEM), including subjects in the fields of  chemistry, computer and information technology science, engineering, geosciences, life sciences, mathematical sciences, physics and astronomy, social sciences (anthropology, economics, psychology and sociology), and STEM education and learning research.

While the White House is clearly gunning for IT companies, as is stated clearly in the unpublished versions of the interim final rules, these significant policy changes are likely to hit many industries detrimentally, including oil & gas/energy, manufacturing, and financial services/banking industries.

Most Significant Policy Changes under DHS Interim Final Rule

• Revising regulatory definition standards for specialty occupation – greatly narrowing which beneficiaries and proffered H-1B positions are eligible for the H-1B visa program, including disqualifying general discipline degrees (business, engineering) and positions that require education in one of several disciplines.
• Requiring collaborating evidence of work in specialty occupation – expanding the employer’s requirements for eligibility, including requiring that the employer show evidence of actual work available to the beneficiary.
• Increasing requirements for third-party placement of H-1B workers – including greater scrutiny of evidence of actual work and employer/employee relationship, as well as limiting petition approval to one (1) year increments for employees placed at third-party sites.

Most Significant Policy Changes under DOL Interim Final Rule

• Restructuring of prevailing wage system – including significant changes to H-1B, E-3, H-1B1, and PERM programs with entry-level wages increasing from the 17^th percentile to the 45^th percentile of wages for the occupation and geographic location.

In a move that has become a calling card of the Trump administration, these significant policy changes are being published as interim final rules, which is important for the following reasons:

• The interim final rules, including all policies changes outlined above, will become effective as of the publication in the Federal Register on October 8, 2020;
• The interim final rules are expected to immediately be challenged by multiple lawsuits and are therefore likely to be put on hold temporarily or even some portions stricken all together.

The immigration legal team at Moodys Tax continues to stay on the pulse of changes in immigration law and policy. Stay tuned for the latest.