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New Rules Affecting H-1B Workers and Employment-Based Green Card Applicants, October 2020

October 16, 2020

On October 8, 2020, the Department of Homeland Security (DHS) published a new rule, “Strengthening the H-1B Nonimmigrant Visa Classification Program” and the U.S. Department of Labor (DOL) published a new rule, “Strengthening Wage Protections for the Temporary and Permanent Employment of Certain Aliens in the United States.” The DHS rule only affects the H-1B visa program, while the DOL rule affects H1B, H1B1, and E-3 visa programs as well as prevailing wage determinations issued by the DOL for PERM labor certifications. The DHS rule was published as an interim final rule despite that it was listed at the proposed rule stage in the Spring 2020 regulatory agenda and prior regulatory agendas. It is currently open for the public comment period. The DHS rule goes into effect December 7, 2020 and the DOL rule goes into effect immediately. Both rules will likely be challenged in the courts by advocacy organizations, which could prevent the rules from moving forward until the court proceedings are resolved.

Below is a brief outline of the changes that will likely have the biggest impact.

The New Rule from the Department of Homeland Security: “Strengthening the H-1B Nonimmigrant Visa Classification Program”

  1. As has been the case for many years, the H-1B beneficiary must be sponsored in a “specialty occupation” to qualify for an H-1B visa. In order to narrow the scope of who qualifies for H-1B visas, DHS is revising the regulatory definition and standards for a “specialty occupation”. These changes include:
    1. The petitioner must prove that there is a direct relationship between the required degree field(s) mentioned in the job description for the proferred position and the position duties. The petitioner may need to explain which university courses directly prepared the beneficiary for the proferred position.
      1. Our firm has seen strong pushback from the government whenever it is not immediately apparent that the degree directly relates to the proferred position. As a result, we believe this change has likely already been felt by those receiving Requests for Evidence on this particular point. DHS is likely only strengthening its ability to deny petitions on this basis.
    2. On the Form I-129 and the accompanying employer support letter, the petitioner must list the degree requirements for the position. DHS now takes the position that a proferred position requiring any STEM degree (which DHS refers to as an unspecified “quantative field”) is no longer sufficient to qualify for an H-1B. The rationale for this is that the degree requirements are too broad and the petitioner cannot prove that there is the necessary direct relationship between the required degrees and the duties of the proferred position.
    3. Proving that the employer normally requires a specific degree is no longer sufficient to prove one of the prongs of the Specialty Occupation test. Previously, the USCIS issued Requests for Evidence asking for proof that the proferred position and the beneficiary comply with the Specialty Occupation test. One of the ways to comply with that test was to show that the petitioner normally required a certain degree to fill that position and that the beneficiary holds that degree. Going forward, the USCIS will no longer accept that prong as passing the test.
      1. DHS notes that it will continue to refer to the Occupational Outlook Handbook (“OOH”) in adjudicating H-1B petitions. Under the new rule, only occupations that are described by the OOH as requiring a degree without exception or qualification will be considered specialty occupations. The OOH, while extensive, is not exhaustive. This is problematic for employers in the modern business landscape of 2020, where jobs, specifically in the IT arena, are constantly evolving to meet employer’s technological needs. Many jobs do not fit neatly into categories listed in the OOH and, as a result, endure substantial scrutiny in the form of Requests for Evidence. Under the new rule, DHS is giving itself more clear-cut authority to deny petitions on this basis.
  2. Third-Party Worksites will continue to be under extreme scrutiny.
    1. Under the new rule, a 1-year maximum validity period will apply whenever the beneficiary will work at a third-party worksite. The burden will be on the petitioner to prove that an employer-employee relationship exists during the entire third-party placement.
      1. Of course, this will result in much higher legal fees and government filing fees for the petitioner, as the petition will need to be renewed annually and will likely receive Requests for Evidence as DHS decides how to carry out these new standards in practice.
    2. DHS will look to the common law definition of the employer-employee relationship to see if the beneficiary qualifies for an H-1B. This includes the “right to control the manner and means by which the product is accomplished “among other factors””. There are eleven factors outlined in the new rule and “all factors must be taken into consideration”.
      1. In practice, it is likely that proving this test could be challenging for some petitioners since, as stated in the new rule, there is no one factor that is more important. Furthermore, if DHS expects each factor of the test to be met, petitioners face a high burden of satisfying all eleven factors.
    3. The new rule further establishes DHS’ authority to perform site visits to H-1B places of employment and, by codifying it in a rule, has solidified this authority for when it is challenged in the future. Site visits at H-1B workplaces have occurred more frequently over the past few years, but the site visit program had never been outlined in law. The new rule gives authority for H-1B site visits in the regulations, which may include an onsite visit to the petitioner’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 DHS considers pertinent to verify facts related to the adjudication of the H-1B petition. If DHS is unable to verify facts during a site visit related to an H-1B petition due to noncooperation by the petitioner or a third-party site facilitator, then DHS may deny or revoke the underlying H-1B petition.
      1. This is a sweeping regulation that gives broad authority for H-1B site visits by DHS. Before this regulation, it was our firm’s position to comply with the DHS official’s requests during a site visit as best as possible. Going forward, the regulations make it clear that compliance and accommodation during a site visit is key. Of course, it is always best to alert your immigration attorney immediately if a site visit is taking place.

The New Rule from the Department of Labor: “Strengthening Wage Protections for the Temporary and Permanent Employment of Certain Aliens in the United States.”

  1. This new rule makes significant changes to wage levels in the Labor Condition Application (which applies to H1B, H1B1, and E-3 visa holders) and the Prevailing Wage Determination (which applies to employment-based green card applicants). 
    1. The wages are broken down into levels 1 through 4 and are based on the worker’s job location. Level 1 is an entry level position and level 4 is considered “fully competent”. Under the old rule, level 1 was at the 17th percentile, level 2 was at the 34th percentile, level 3 was at the 50th percentile, and level 4 was at the 67th percentile. This wage level structure had been in place since 2005. Under the new rule, level 1 is at the 45th percentile, level 2 was at the 62th percentile, level 3 was at the 78th percentile, and level 4 was at the 95th percentile. This significantly increases the wages that are required to be paid to the foreign national worker. 
      1. At first glance, this may seems like a win for H-1B, H1B1, and E-3 workers and employment-based green card applicants. However, the larger effect will be to deter employers from hiring foreign talent because the cost will be so high. Politically, it benefits DHS and the current administration to say that they are increasing access to high-paying jobs for American citizens. For petitioners, however, who truly cannot find qualified applicants to fill their roles (which is very common in the IT sector), the roles will simply stay vacant or the roles are outsourced. Both of these results harm American employers and well as the American economy as a whole. We anticipate that this new rule will be especially detrimental to employers looking to hire students present on F-1 visas who are about to graduate from American colleges and universities, as the prevailing wage (level 1) for an entry level position will be too high and impractical for their hiring and wage calculation. 
      2. For H1B, H1B1, and E-3 cases, if an ETA form 9035/9035E Labor Condition Application was properly submitted before October 8th, 2020, it will be processed under the old rule. Specifically, if the LCA has been issued, but the corresponding petition has not been filed yet, the LCA that was certified before the new rule was in place will still control. 
      3. For PERM labor certification cases, if an ETA form 9141 Application for Prevailing Wage Determination was issued before October 8th, 2020, the old rule controls. However, if the ETA form 9141 Application for Prevailing Wage Determination was issued after October 8th, it will be processed under the new rule. 

In conclusion, both rules are expected to be challenged in Federal court, so it will likely be months before we see exactly how the rules are implemented. As always, our firm will be closely monitoring how these rules are carried out in practice, both before and after the court challenges.