US updates rules to expand flexibility and improve oversight for H-1B visa programme   

Just days before Donald Trump’s inauguration as US President on 20 January 2025, President Biden’s administration has issued a “final rule” about the administration of the H-1B visa programme. The “H-1B Modernization Rule” will go into effect today, 17 January 2025.
 
The H1-B programme is the coveted visa route allowing US employers to temporarily hire international student graduates with specialised degrees at the bachelor’s level or higher. Applications for H1-B visas are invariably higher than the quota set for them each year. About 85,000 are allocated annually. Most students obtaining an H1-B visa are hired for jobs in technology, engineering, healthcare, financial services, specialised businesses, and education (including academia).

What’s new for the H1-B?

The government press release notes that the H-1B Modernization Rule will “provide greater benefits and flexibilities for U.S. employers and specialty occupation workers, helping to meet U.S. labor needs.”

U.S. Citizenship and Immigration Services (USCIS) director Ur M. Jaddou said:

“The H-1B program was created by Congress in 1990, and there’s no question it needed to be modernized to support our nation’s growing economy. The changes made in today’s final rule will ensure that U.S. employers can hire the highly skilled workers they need to grow and innovate while enhancing the integrity of the program.”

The Rule has been set up in a way that it would be complicated for the incoming president to undo. As global legal firm Mayer-Brown notes:

“A president can easily rescind, modify, or replace executive orders and administrative policies without requiring public input or a lengthy procedural process. However, regulations, such as the H-1B Modernization Rule, are formal rules created by federal agencies that have the force of law and require agencies to go through a formal rulemaking process to make changes.”

Implications for international students

For international students, a few of the most important changes are:

More flexibility around around the degrees that make graduates eligible for an H-1B visa. Previously, degrees had to be “directly related” to the job an international graduate wanted to hold. The problem there was that a candidate could hold a degree – say an interdisciplinary degree – that would be perfect for the job requirements but because the degree was not “directly” linked to the “job,” it excluded the candidate from eligibility.
 
Now, USCIS has changed the language to “in a directly related specific specialty,” and defined “directly related” as meaning there is a “logical connection” between the degree (or its equivalent) and the “duties of the position.” This sounds confusing (it is) but suffice to say that the changed language is intended to allow a wider range of applicants to be eligible for the HI-B because “direct” refers to niche tasks within a job rather than the job itself.

Immigration Impact elaborates:

“USCIS specifies in the regulation that there could be a ‘range of qualifying degree fields’ if each field is ‘directly related to the duties of the position.’ USCIS also addressed that it was not focusing on degree titles and would consider whether the noncitizen’s ‘actual course of study is directly related to the duties of the position.’”

While this change sounds promising at first bounce, there are some experts who worry about how officials reviewing applications will determine a “logical connection” and that decisions may be made subjectively. However, the new rule does reflect the nuanced roles that employers now need to fill – roles that don’t necessarily correspond to a specific degree – and is strategically sound as a result.

More time for international graduates on an F-1 visa to transition to an H1-B visa. Previously, F-1 visa holders sometimes – through no fault of their own – saw their immigration status lapse because of delays in processing their H1-B petition. Most F-1 students complete their programmes or related Optional Practical Training (OPT) in the spring or summer. Previously, they only had 60 days to maintain their legal status. If their H1-B petition was not processed by October 1, those students would have to leave the US. Now, the “gap” between the F-1 and H1-B visa has been extended to April 1. The formal USCIS language for this rule is the “automatic ‘cap-gap’ extension” has been “codified.”

New eligibility for entrepreneurs. If an international student/worker has a “controlling interest” in their own business (i.e., owns at least 50% of it), they are now eligible for H1-B status “subject to reasonable conditions.” However, the maximum validity period for this category of H-1B validity is 18 months for the first visa as well as the first extension of it. Other H-1B visas’ validity is up to three years.

An expansion of the type of non-profit and governmental organisations that are exempt from the annual caps on H-1B visas. Those organisations used to have to prove their “primary mission” was research, but now they must only prove that research is “one of their fundamental activities.”

Strengthened integrity

As well as its intention to make it easier for American employers to hire talented foreign workers, the “final rule” affecting the H1-B programme also includes provisions for immigration authorities to apply greater scrutiny to employers and workers. For example, immigration authorities will check that the “petitioner” (i.e., the employer) has a “bona fide” (genuine) job opening for the H1-B worker and doesn’t just anticipate having one.

There are several other stipulations, but they all amount to employers needing to submit more documentation and to be ready for site visits from immigration authorities at any time. If inaccurate information is provided by the employer or if anything else seems suspect, USCIS will impose stiff penalties.

Secretary of Homeland Security Alejandro N. Mayorkas said:

“American businesses rely on the H-1B visa program for the recruitment of highly skilled talent, benefitting communities across the country. These improvements to the program provide employers with greater flexibility to hire global talent, boost our economic competitiveness, and allow highly skilled workers to continue to advance American innovation.”

Good news for J-1 students as well

In December, the State Department recently made it easier for some J-1 visa holders (those on work/study exchange programmes) to remain in the U.S. by narrowing the list of countries on the Exchange Visitor Skills List to 45 countries.

Students from those 45 countries must return home for a period of two years before applying for another US visa because their countries are deemed to have a pressing need for their specialised skills (e.g., Engineering). The intention is to reduce brain drain from developing countries.

The way the current list has been devised, countries with a per capita GDP under US$7,500 or those where the rate of outbound migration is notably high are considered as likely to benefit from its students (on J-1 visas) returning to work for at least two years.

India and China have been removed from the list – which is a major development given the number of students from those countries studying in the US. The number of Chinese students on J-1 visas grew by 120% in 2023 compared with a 30% drop in Chinese on F-1 visas. Similarly, there was growth of 122% for Indians on J-1 visas (compared with a 43% rise in those on F-1 visas).

Other countries that have been removed are Brazil, Saudi Arabia, South Korea, and the UAE.

What will happen when President-elect Trump is sworn in on 20 January?

There is a great deal of uncertainty about what immigration policies governing highly skilled foreign workers and STEM students will look like under President-elect Trump. This time round, Trump is highly influenced and supported by the high-tech community in the US, including Tesla/X’s Elon Musk. Musk is in favour of the H-1B programme but believes it needs reforms, including raising the minimum salary for H-1B visa holders and increasing the cost employers must pay for hiring and retaining H-1B workers. 

But a significant proportion of other powerful Republicans oppose the H-1B programme, and they will mount a vigorous opposition to Musk’s position.

Whatever happens, research has shown that the H-1B programme drives innovation in the US and creates – rather than takes away – jobs for American citizens. Writing in the January 2025 issue of The Atlantic, Rogé Karma explains:

“Most careful experimental studies on the program find that, overall, it has neutral or positive effects on the employment prospects and wages of native-born workers. Companies that receive H-1B visas tend to grow faster than companies that don’t—likely because many of them really are hiring foreign workers whose skills they need—and thus often end up employing more native workers overall. Employers receiving H-1B visas also tend to develop new products and technologies at higher rates, which helps create new jobs.”

For additional background, please see:

• “What will a second Trump presidency mean for international education?”