New H-1B Third-Party Placement Rules: Stricter Guidelines and Key Changes Effective January 2025

Introduction

Good evening from Houston, Texas. Every Tuesday evening, we bring in live updates on immigration, and today, I'm joined by my business partner Stephen Brown. We're here to discuss the long-awaited modernization of H-1B requirements and regulations, which will be effective beginning January 18, 2025. This overhaul comes with numerous changes, especially in the third-party placement sector, which we will delve into.

Key Highlights of the New Regulations

Modernizing Specialty Occupation Requirements: The regulations ease the interpretation of specialty occupations. Previously, under the Trump administration, USCIS was strict in requiring each position to necessitate a specific degree. The new rules state that while it’s normally required for the position, it does not always have to be the case.
Stricter Requirements for Third-Party Placements: The regulations impose more restrictions on third-party placements. Consulting companies that place individuals in major corporations (like Coca-Cola) must now prove that the role at both the consulting firm and the end client requires a specialty occupation. This is a notable shift for smaller consulting firms with fewer resources.
Mandatory FDNS Site Visits: In a significant change, the Fraud Detection and National Security (FDNS) site visits are now mandatory. This means compliance investigations can occur at multiple levels, including visits to consulting companies, end clients, and employees to assess adherence to H-1B requirements.
Beneficiary-Owned Businesses: There's an encouraging development where those on H-1B visas can own a majority stake (over 50%) in their businesses. They can also work in non-specialty positions, like a software professional functioning as a CEO, provided that the majority of their work aligns with specialty occupation requirements.
Extensions and Flexibility: The new rules provide flexibility in the H-1B application process and allow for better handling of cap-exempt employers. The provision on cap-gap is extended, allowing those applying under certain circumstances to continue their stay until April 1, 2025.

Concerns with the New Regulations

Despite the positives, this new framework brings about certain challenges. With increased scrutiny, small consulting firms may find it difficult to provide the necessary documentation to prove that the positions they fill meet the new specialty occupation requirements. Moreover, the mandatory FDNS visits could complicate the process, as employees and employers will no longer have the option to not participate.

The effective date for these regulations is just around the corner, and with the change in administration to Trump expected, there may be concerns about how these regulations will hold up under a new government. Currently, the new regulations are set to be finalized on January 18, 2025, which is just days before the Trump administration takes office.

Keywords

H-1B, Third-party placements, Specialty occupation, USCIS, FDNS site visits, Beneficiary-owned business, Cap-gap, Employment-based immigration, Immigration updates

FAQ

1. What are the main changes in the new H-1B regulations?
The main changes include stricter requirements for third-party placements, new specialty occupation definitions, mandatory FDNS site visits, and provisions for beneficiary-owned businesses.

2. When will these new guidelines take effect?
The new regulations will be effective from January 18, 2025.

3. What impact do the FDNS site visits have on H-1B holders?
The FDNS site visits are now mandatory and can involve evaluations at multiple levels, leading to increased scrutiny for employers and employees.

4. Can H-1B holders own a business under the new rules?
Yes, H-1B holders can own more than 50% of their businesses and also work in non-specialty occupations, as long as the majority of their work is within the aligned specialty field.

5. Is there a risk of travel bans or restrictions under the new administration?
Yes, many experts are concerned that the new Trump administration may implement new travel bans or restrictions, especially focusing on border control.

6. When is the deadline to file for the H-1B lottery?
Employers should start preparing for the H-1B lottery in February and March, with the election process commencing soon after that.