Modernizing H-1B Requirements, Providing Flexibility in the F-1 Program, and Program Improvements Affecting Other Nonimmigrant Workers, 72870-72963 [2023-23381]

Download as PDF 72870 Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules DEPARTMENT OF HOMELAND SECURITY 8 CFR Part 214 [CIS No. 2745–23; DHS Docket No. USCIS– 2023–0005] RIN 1615–AC70 Modernizing H–1B Requirements, Providing Flexibility in the F–1 Program, and Program Improvements Affecting Other Nonimmigrant Workers U.S. Citizenship and Immigration Services, DHS. ACTION: Notice of proposed rulemaking. AGENCY: The U.S. Department of Homeland Security (DHS) proposes to amend its regulations governing H–1B specialty occupation workers to modernize and improve the efficiency of the H–1B program, add benefits and flexibilities, and improve integrity measures. Some of the proposed provisions would narrowly impact other nonimmigrant classifications, including: H–2, H–3, F–1, L–1, O, P, Q–1, R–1, E– 3, and TN. DHS intends to finalize the proposals contained in this rulemaking through one or more final rules, depending on agency resources. DATES: Written comments must be submitted on or before December 22, 2023. ADDRESSES: You may submit comments on the entirety of this proposed rulemaking package, identified by DHS Docket No. USCIS–2023–0005 through the Federal eRulemaking Portal: https:// www.regulations.gov. Follow the website instructions for submitting comments. The electronic Federal Docket Management System will accept comments before midnight Eastern time on December 22, 2023. Comments submitted in a manner other than the one listed above, including emails or letters sent to DHS or USCIS officials, will not be considered comments on the proposed rule and may not receive a response from DHS. Please note that DHS and USCIS cannot accept any comments that are hand-delivered or couriered. In addition, DHS and USCIS cannot accept comments contained on any form of digital media storage devices, such as CDs/DVDs and USB drives. USCIS is also not accepting mailed comments at this time. If you cannot submit your comment by using https:// www.regulations.gov, please contact Samantha Deshommes, Chief, Regulatory Coordination Division, Office of Policy and Strategy, U.S. Citizenship and Immigration Services, U.S. Department of Homeland Security, lotter on DSK11XQN23PROD with PROPOSALS3 SUMMARY: VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 by telephone at (240) 721–3000 for alternate instructions. FOR FURTHER INFORMATION CONTACT: Charles L. Nimick, Chief, Business and Foreign Workers Division, Office of Policy and Strategy, U.S. Citizenship and Immigration Services, U.S. Department of Homeland Security, 5900 Capital Gateway Drive, Camp Springs, MD 20746; telephone (240) 721–3000. SUPPLEMENTARY INFORMATION: Table of Contents I. Public Participation II. Executive Summary A. Purpose of the Regulatory Action B. Summary of the Major Provisions of the Regulatory Action 1. Modernization and Efficiencies 2. Benefits and Flexibilities 3. Program Integrity C. Summary of Costs and Benefits D. Request for Preliminary Public Input E. Future Rulemaking Actions III. Background and Purpose A. Legal Authority B. Background 1. The H–1B Program 2. The F–1 Program IV. Discussion of the Proposed Rule A. Modernization and Efficiencies 1. Amending the Definition of a ‘‘Specialty Occupation’’ 2. Amending the Criteria for Specialty Occupation Positions 3. Amended Petitions 4. Deference 5. Evidence of Maintenance of Status 6. Eliminating the Itinerary Requirement for H Programs 7. Validity Expires Before Adjudication B. Benefits and Flexibilities 1. H–1B Cap Exemptions 2. Automatic Extension of Authorized Employment Under 8 CFR 214.2(f)(5)(vi) (Cap-Gap) 3. Start Date Flexibility for Certain H–1B Cap-Subject Petitions C. Program Integrity 1. The H–1B Registration System 2. Beneficiary Centric Selection 3. Bar on Multiple Registrations Submitted by Related Entities 4. Registrations With False Information or That Are Otherwise Invalid 5. Alternatives Considered 6. Provisions To Ensure Bona Fide Job Offer for a Specialty Occupation Position a. Contracts b. Non-Speculative Employment c. LCA Corresponds With the Petition d. Revising the Definition of U.S. Employer e. Employer-Employee Relationship f. Bona Fide Job Offer g. Legal Presence and Amenable to Service of Process 7. Beneficiary-Owners 8. Site Visits 9. Third-Party Placement (Codifying Defensor) D. Request for Preliminary Public Input Related to Future Actions/Proposals 1. Use or Lose 2. Beneficiary Notification PO 00000 Frm 00002 Fmt 4701 Sfmt 4702 E. Potential Publication of One or More Final Rules F. Severability V. Statutory and Regulatory Requirements A. Executive Order 12866 (Regulatory Planning and Review) and Executive Order 13563 (Improving Regulation and Regulatory Review) 1. Summary 2. Background 3. Costs, Transfers, and Benefits of the Proposed Rule a. Amended Petitions b. Deference to Prior USCIS Determinations of Eligibility in Requests for Extensions of Petition Validity c. Evidence of Maintenance of Status d. Eliminating the Itinerary Requirement for H Programs e. Validity Period Expires Before Adjudication f. H–1B Cap Exemptions g. Automatic Extension of Authorized Employment ‘‘Cap-Gap’’ h. Start Date Flexibility for Certain H–1B Cap-Subject Petitions i. The H–1B Registration System j. Beneficiary Centric Selection k. Bar on Multiple Registrations Submitted by Related Entities l. Registrations With False Information or That Are Otherwise Invalid m. Provisions To Ensure Bona Fide Job Offer for a Specialty Occupation Position (1) Contracts (2) Non-Speculative Employment (3) LCA Corresponds With the Petition (4) Revising the Definition of U.S. Employer (5) Employer-Employee Relationship n. Beneficiary-Owners o. Site Visits p. Third-Party Placement (Codifying Defensor) q. Additional Time Burden for Form I–129 H–1B r. Additional Time Burden for H Classification Supplement to Form I–129 4. Alternatives Considered 5. Total Quantified Net Costs of the Proposed Regulatory Changes B. Regulatory Flexibility Act (RFA) 1. Initial Regulatory Flexibility Analysis a. A Description of the Reasons Why the Action by the Agency Is Being Considered b. A Statement of the Objectives of, and Legal Basis for, the Proposed Rule c. A Description and, Where Feasible, an Estimate of the Number of Small Entities to Which the Proposed Changes Would Apply d. A Description of the Projected Reporting, Recordkeeping, and Other Compliance Requirements of the Proposed Rule, Including an Estimate of the Classes of Small Entities That Will Be Subject to the Requirement and the Types of Professional Skills e. An Identification of All Relevant Federal Rules, to the Extent Practical, That May Duplicate, Overlap, or Conflict With the Proposed Rule f. A Description of Any Significant Alternatives to the Proposed Rule That Accomplish the Stated Objectives of E:\FR\FM\23OCP3.SGM 23OCP3 Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules Applicable Statutes and That Minimize any Significant Economic Impact of the Proposed Rule on Small Entities C. Unfunded Mandates Reform Act of 1995 (UMRA) D. Congressional Review Act E. Executive Order 13132 (Federalism) F. Executive Order 12988: Civil Justice Reform G. Executive Order 13175 (Consultation and Coordination With Indian Tribal Governments) H. National Environmental Policy Act (NEPA) I. Paperwork Reduction Act lotter on DSK11XQN23PROD with PROPOSALS3 Table of Abbreviations AAO—Administrative Appeals Office AC21—American Competitiveness in the Twenty-first Century Act ACWIA—American Competitiveness and Workforce Improvement Act of 1998 BLS—Bureau of Labor Statistics CEQ—Council on Environmental Quality CFR—Code of Federal Regulations CMSA—Consolidated Metropolitan Statistical Area COS—Change of Status CPI–U—Consumer Price Index for All Urban Consumers D/S—Duration of status DHS—U.S. Department of Homeland Security DOL—U.S. Department of Labor DOS—U.S. Department of State FDNS—Fraud Detection and National Security FR—Federal Register FY—Fiscal Year HR—Human Resources HSA—Homeland Security Act of 2002 ICE—Immigration and Customs Enforcement IMMACT 90—Immigration Act of 1990 INA—Immigration and Nationality Act INS—legacy Immigration and Naturalization Service IRFA—Initial Regulatory Flexibility Analysis IRS—Internal Revenue Service LCA—Labor Condition Application MSA—Metropolitan Statistical Area NAICS—North American Industry Classification System NEPA—National Environmental Policy Act NOID—Notice of Intent to Deny NPRM—Notice of proposed rulemaking OIRA—Office of Information and Regulatory Affairs OMB—Office of Management and Budget OP&S—Office of Policy and Strategy OPT—Optional Practical Training PM—Policy Memorandum PMSA—Primary Metropolitan Statistical Area PRA—Paperwork Reduction Act PRD— Policy Research Division Pub. L.—Public Law RFA—Regulatory Flexibility Act of 1980 RFE—Request for Evidence RIA— Regulatory Impact Analysis RIN—Regulation Identifier Number SBA—Small Business Administration SEVP—Student and Exchange Visitor Program SOC—Standard Occupational Classification VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 Stat.—U.S. Statutes at Large TLC—Temporary Labor Certification UMRA—Unfunded Mandates Reform Act U.S.C.—United States Code USCIS—U.S. Citizenship and Immigration Services I. Public Participation DHS invites all interested parties to participate in this rulemaking by submitting written data, views, comments, and arguments on all aspects of this proposed rule. DHS also invites comments that relate to the economic, environmental, or federalism effects that might result from this proposed rule. Comments must be submitted in English, or an English translation must be provided. Comments that will provide the most assistance to USCIS in implementing these changes will reference a specific portion of the proposed rule, explain the reason for any recommended change, and include data, information, or authority that support such recommended change. Comments submitted in a manner other than the one listed above, including emails or letters sent to DHS or USCIS officials, will not be considered comments on the proposed rule and may not receive a response from DHS. Instructions: If you submit a comment, you must include the agency name (U.S. Citizenship and Immigration Services) and the DHS Docket No. USCIS–2023–0005 for this rulemaking. Please note all submissions will be posted, without change, to the Federal eRulemaking Portal at https:// www.regulations.gov, and will include any personal information you provide. Therefore, submitting this information makes it public. You may wish to consider limiting the amount of personal information that you provide in any voluntary public comment submission you make to DHS. DHS may withhold information provided in comments from public viewing that it determines may impact the privacy of an individual or is offensive. For additional information, please read the Privacy and Security Notice available at https://www.regulations.gov. Docket: For access to the docket and to read background documents or comments received, go to https:// www.regulations.gov, referencing DHS Docket No. USCIS–2023–0005. You may also sign up for email alerts on the online docket to be notified when comments are posted or a final rule is published. II. Executive Summary A. Purpose of the Regulatory Action The purpose of this rulemaking is to modernize and improve the regulations PO 00000 Frm 00003 Fmt 4701 Sfmt 4702 72871 relating to the H–1B program by: (1) streamlining the requirements of the H– 1B program and improving program efficiency; (2) providing greater benefits and flexibilities for petitioners and beneficiaries; and (3) improving integrity measures. Some of the proposed provisions would narrowly impact other nonimmigrant classifications. B. Summary of the Major Provisions of the Regulatory Action 1. Modernization and Efficiencies DHS proposes to streamline requirements for the H–1B program by: (1) revising the regulatory definition and criteria for a ‘‘specialty occupation’’; (2) clarifying that ‘‘normally’’ does not mean ‘‘always’’ within the criteria for a specialty occupation; and (3) clarifying that a position may allow a range of degrees, although there must be a direct relationship between the required degree field(s) and the duties of the position. As 21st century employers strive to generate better hiring outcomes, improving the match between required skills and job duties, employers have increasingly become more aware of a skills-first culture, led by the Federal Government’s commitment to attract and hire individuals well-suited to available jobs.1 The flexibility inherent in H–1B adjudications to identify job duties and particular positions where a bachelor’s or higher degree in a specific specialty, or its equivalent, is normally required, allows employers to explore where skills-based hiring is sensible. DHS also proposes to clarify when an amended or new petition must be filed due to a change in an H–1B worker’s place of employment to be consistent with current policy guidance. Additionally, DHS proposes to codify and clarify its deference policy to state that, if there has been no material change in the underlying facts, adjudicators generally should defer to a prior determination involving the same parties and underlying facts. DHS also proposes to update the regulations to expressly require that evidence of maintenance of status must be included with the petition if a beneficiary is seeking an extension or amendment of stay. This policy would impact all employment-based nonimmigrant classifications that use Form I–129, 1 See, e.g., U.S. Office of Personnel Management, Memorandum for Heads of Executive Departments and Agencies: ‘‘Guidance Release—E.O. 13932; Modernizing and Reforming the Assessment and Hiring of Federal Job Candidates’’ (May 19, 2022), https://chcoc.gov/content/guidance-release-eo13932-modernizing-and-reforming-assessment-andhiring-federal-job. E:\FR\FM\23OCP3.SGM 23OCP3 72872 Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules Petition for Nonimmigrant Worker. DHS further proposes to eliminate the itinerary requirement, which would apply to all H classifications, and allow petitioners to amend requested validity periods where the validity expires before adjudication. lotter on DSK11XQN23PROD with PROPOSALS3 2. Benefits and Flexibilities DHS proposes to modernize the definition of employers who are exempt from the annual statutory limit on H–1B visas to create more flexibility for nonprofit and governmental research organizations and beneficiaries who are not directly employed by a qualifying organization. Specifically, DHS proposes to change the definition of ‘‘nonprofit research organization’’ and ‘‘governmental research organization’’ by replacing ‘‘primarily engaged’’ and ‘‘primary mission’’ with ‘‘fundamental activity’’ to permit a nonprofit entity or governmental research organization that conducts research as a fundamental activity, but is not primarily engaged in research or where research is not a primary mission, to meet the definition of a nonprofit research entity. Additionally, DHS proposes to revise the requirements for beneficiaries to qualify for H–1B cap exemption when they are not directly employed by a qualifying organization, but still provide essential work, even if their duties do not necessarily directly further the organization’s essential purpose. DHS also proposes to provide flexibilities, such as automatically extending the duration of F–1 status, and any employment authorization granted under 8 CFR 274a.12(c)(3)(i)(B) or (C), until April 1 of the relevant fiscal year, rather than October 1 of the same fiscal year, to avoid disruptions in lawful status and employment authorization for F–1 students changing their status to H–1B. Additionally, DHS is proposing to clarify the requirements regarding the requested employment start date on H–1B cap-subject petitions to permit filing with requested start dates that are after October 1 of the relevant fiscal year, consistent with current USCIS policy. 3. Program Integrity DHS proposes to address H–1B cap registration abuse by changing the way USCIS selects registrations. Instead of selecting by registration, USCIS would select registrations by unique beneficiary, thereby reducing the potential for gaming the process to increase chances for selection and helping ensure that each beneficiary would have the same chance of being selected, regardless of how many registrations are submitted on their VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 behalf. DHS also proposes to clarify that related entities are prohibited from submitting multiple registrations for the same beneficiary, similar to the prohibition on related entities filing multiple cap-subject petitions for the same beneficiary for the same fiscal year’s numerical allocations. Additionally, DHS proposes to codify USCIS’s ability to deny H–1B petitions or revoke an approved H–1B petition where the underlying registration contained a false attestation or was otherwise invalid. DHS further proposes to improve the integrity of the H–1B program by: (1) codifying its authority to request contracts; (2) requiring that the petitioner establish that it has an actual, non-speculative position in a specialty occupation available for the beneficiary as of the requested start date; (3) ensuring that the labor condition application (LCA) properly supports and corresponds with the petition; (4) revising the definition of ‘‘United States employer’’ by codifying the existing requirement that the petitioner has a bona fide job offer for the beneficiary to work within the United States as of the requested start date, consistent with current DHS policy; and (5) adding a requirement that the petitioner have a legal presence and be amenable to service of process in the United States. DHS additionally proposes to clarify that beneficiary-owners may be eligible for H–1B status, while setting reasonable conditions for when the beneficiary owns a controlling interest in the petitioning entity. DHS also proposes to codify USCIS’s authority to conduct site visits and clarify that refusal to comply with site visits may result in denial or revocation of the petition. Additionally, DHS proposes to clarify that if an H–1B worker will be staffed to a third party, meaning they will be contracted to fill a position in the third party’s organization, it is the requirements of that third party, and not the petitioner, that are most relevant when determining whether the position is a specialty occupation. Through these provisions, DHS aims to prevent fraud and abuse and maintain H–1B program integrity. C. Summary of Costs and Benefits As discussed in the preamble, the purpose of this rulemaking is to modernize and improve the regulations relating to the H–1B program by: (1) streamlining H–1B program requirements and improving program efficiency; (2) providing greater benefits and flexibilities for petitioners and beneficiaries; and (3) improving integrity measures. PO 00000 Frm 00004 Fmt 4701 Sfmt 4702 For the 10-year period of analysis of the proposed rule, DHS estimates the annualized net costs of this rulemaking would be $6,339,779 annualized at 3 percent and 7 percent. Table 12 provides a more detailed summary of the proposed rule provisions and their impacts. D. Request for Preliminary Public Input Finally, DHS is requesting preliminary public input on ideas that would curb or eliminate the possibility that petitioners may have speculative job opportunities as of the requested start date and delay admission of H–1B beneficiaries until the petitioner has secured work for the H–1B beneficiary, including two potential approaches DHS is considering for future action. DHS is also seeking preliminary public input on ways to provide H–1B and other Form I–129 beneficiaries with notice of USCIS actions taken on petitions filed on their behalf. E. Future Rulemaking Actions After carefully considering any public comments received on the proposals in this NPRM, DHS may move to finalize the proposed provisions through one or more final rules, and may possibly do so in time for the fiscal year (FY) 2025 cap season, depending on agency resources. III. Background and Purpose A. Legal Authority The Secretary of Homeland Security’s authority for these proposed regulatory amendments is found in various sections of the Immigration and Nationality Act (INA or the Act), 8 U.S.C. 1101 et seq., and the Homeland Security Act of 2002 (HSA), Public Law 107–296, 116 Stat. 2135, 6 U.S.C. 101 et seq. General authority for issuing this proposed rule is found in section 103(a) of the INA, 8 U.S.C. 1103(a), which authorizes the Secretary to administer and enforce the immigration and nationality laws and establish such regulations as the Secretary deems necessary for carrying out such authority, as well as section 112 of the HSA, 6 U.S.C. 112, which vests all of the functions of DHS in the Secretary and authorizes the Secretary to issue regulations.2 Further authority for these regulatory amendments is found in: • Section 101(a)(15) of the INA, 8 U.S.C. 1101(a)(15), which establishes 2 Although several provisions of the INA discussed in this NPRM refer exclusively to the ‘‘Attorney General,’’ such provisions are now to be read as referring to the Secretary of Homeland Security by operation of the HSA. See 6 U.S.C. 202(3), 251, 271(b), 542 note, 557; 8 U.S.C. 1103(a)(1), (g), 1551 note; Nielsen v. Preap, 139 S. Ct. 954, 959 n.2 (2019). E:\FR\FM\23OCP3.SGM 23OCP3 lotter on DSK11XQN23PROD with PROPOSALS3 Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules classifications for noncitizens who are coming temporarily to the United States as nonimmigrants, including the H–1B classification, see INA section 101(a)(15)(H)(i)(b), 8 U.S.C. 1101(a)(15)(H)(i)(b); • Section 214(a)(1) of the INA, 8 U.S.C. 1184(a)(1), which authorizes the Secretary to prescribe, by regulation, the time and conditions of the admission of nonimmigrants; • Section 214(c) of the INA, 8 U.S.C. 1184(c), which, inter alia, authorizes the Secretary to prescribe how an importing employer may petition for nonimmigrant workers, including certain nonimmigrants described at sections 101(a)(a)(15)(H), (L), (O), and (P), 8 U.S.C. 1101(a)(15)(H), (L), (O), and (P); the information that an importing employer must provide in the petition; and certain fees that are required for certain nonimmigrant petitions; • Section 214(e) of the INA, 8 U.S.C. 1184(e), which provides for the admission of citizens of Canada or Mexico as TN nonimmigrants; • Section 214(g) of the INA, 8 U.S.C. 1184(g), which, inter alia, prescribes the H–1B numerical limitations, various exceptions to those limitations, and the period of authorized admission for H– 1B nonimmigrants; • Section 214(i) of the INA, 8 U.S.C. 1184(i), which sets forth the definition and requirements of a ‘‘specialty occupation’’; • Section 235(d)(3) of the INA, 8 U.S.C. 1225(d)(3) (‘‘any immigration officer shall have the power to administer oaths and to take and consider evidence of or from any person touching the privilege of any alien or person he believes or suspects to be an alien to enter, reenter, transit through, or reside in the United States or concerning any matter which is material and relevant to the enforcement of this chapter and the administration of the Service.’’); • Section 248 of the INA, 8 U.S.C. 1258, which authorizes a noncitizen to change from any nonimmigrant classification to any other nonimmigrant classification (subject to certain exceptions) if the noncitizen was lawfully admitted to the United States as a nonimmigrant and is continuing to maintain that status, and is not otherwise subject to the 3- or 10-year bar applicable to certain noncitizens who were unlawfully present in the United States; • Section 274A of the INA, 8 U.S.C. 1324a, which recognizes the Secretary’s authority to extend employment authorization to noncitizens in the United States; VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 • Section 287(b) of the INA, 8 U.S.C. 1357(b), which authorizes the taking and consideration of evidence concerning any matter that is material or relevant to the enforcement of the INA; • Section 402 of the Homeland Security Act of 2002 (HSA), Public Law 107–296, 116 Stat. 2135, 6 U.S.C. 202, which charges the Secretary with ‘‘[e]stablishing and administering rules . . . governing the granting of visas or other forms of permission . . . to enter the United States’’ and ‘‘[e]stablishing national immigration enforcement policies and priorities,’’ id.; see also HSA sec. 428, 6 U.S.C. 236; and • Section 451(a)(3) and (b) of the HSA, 6 U.S.C. 271(a)(3) and (b), transferring to USCIS the authority to adjudicate petitions for nonimmigrant status, establish policies for performing that function, and set national immigration services policies and priorities. B. Background 1. The H–1B Program The H–1B nonimmigrant visa program allows U.S. employers to temporarily employ foreign workers in specialty occupations, defined by statute as occupations that require the theoretical and practical application of a body of highly specialized knowledge and a bachelor’s or higher degree in the specific specialty, or its equivalent. See INA sections 101(a)(15)(H)(i)(b) and 214(i), 8 U.S.C 1101(a)(15)(H)(i)(b) and 1184(i). The Immigration Act of 1990 (Pub. L. 101–649) (IMMACT 90) significantly reformed the H–1B program. To protect U.S. workers, IMMACT 90 required a certified LCA by the Secretary of Labor as a prerequisite for classification as an H–1B nonimmigrant. The LCA requirement, and the associated obligations the employer must attest to and comply with, including the prevailing or actual wage requirement, were intended to safeguard the wages and working conditions of U.S. workers.3 Through IMMACT 90, Congress set the current annual cap for the H–1B visa category at 65,000,4 which limited the number of beneficiaries who may be issued an initial H–1B visa or otherwise provided 3 See U.S. Gov’t Accountability Off., GAO/PEMD– 92–17, ‘‘Immigration and the Labor Market: Nonimmigrant Alien Workers in the United States,’’ at 18 (1992). 4 Up to 6,800 visas are set aside from the 65,000 each fiscal year for the H–1B1 visa program under terms of the legislation implementing the U.S.-Chile and U.S.-Singapore free trade agreements. See INA sections 101(a)(15)(H)(i)(b1), 214(g)(8), 8 U.S.C. 1101(a)(15)(H)(i)(b1), 1184(g)(8). PO 00000 Frm 00005 Fmt 4701 Sfmt 4702 72873 initial H–1B status each fiscal year.5 Prior to IMMACT 90, no limit existed on the number of initial H–1B visas that could be granted each fiscal year. Congressional deliberations ahead of the enactment of the American Competitiveness and Workforce Improvement Act of 1998 (ACWIA) describe the H–1B program’s purpose both as filling shortages and creating opportunities for innovation and expansion.6 Congress also set up several exemptions to the annual H–1B cap. For example, workers who will be employed at an institution of higher education (as defined in section 101(a) of the Higher Education Act of 1965, as amended) or a related or affiliated nonprofit entity, and workers who will be employed at a nonprofit or governmental research organization, are exempt from the cap. These exemptions are not numerically capped. See INA section 214(g)(5)(A)– (B), 8 U.S.C. 1184(g)(5)(A)–(B). Congress further provided an exemption from the numerical limits in INA section 214(g)(1)(A), 8 U.S.C. 1184(g)(1)(A), for 20,000 new H–1B visas, or grants of initial H–1B status, each fiscal year for foreign nationals who have earned a U.S. master’s or higher degree (‘‘advanced degree exemption’’).7 Cap exemptions are discussed in more detail below. To manage the annual cap, USCIS used a random selection process in years of high demand to determine which petitions were selected toward the projected number of petitions needed to reach the annual H–1B numerical allocations.8 In order to better manage the selection process, DHS created a registration requirement for H– 1B cap-subject petitions, which was first implemented in 2020 for the FY 2021 5 The 65,000 annual H–1B numerical limitation was increased for FYs 1999–2003. See INA section 214(g)(1)(A), 8 U.S.C. 1184(g)(1)(A), as amended by section 411 of the ACWIA, Public Law 105–277, div. C, tit. IV, 112 Stat. 2681, and the American Competitiveness in the Twenty-first Century Act of 2000 (AC21), Public Law 106–313, 114 Stat. 1251, as amended by the 21st Century Department of Justice Appropriations Authorization Act, Public Law 107–273, 116 Stat. 1758 (2002). Subsequent to IMMACT 90, Congress also created several exemptions from the 65,000 numerical limitation. See INA section 214(g)(5), 8 U.S.C. 1184(g)(5). 6 See 144 Cong. Rec. at S12749 (statement of Sen. Abraham) (‘‘[T]his issue [of increasing H–1B visas] is not only about shortages, it is about opportunities for innovation and expansion.’’). 7 See INA section 214(g)(5)(C), 8 U.S.C. 1184(g)(5)(C). This rule also may refer to the 20,000 exemptions under section 214(g)(5)(C) from the H– 1B regular cap as the ‘‘advanced degree exemption allocation’’ or ‘‘advanced degree exemption numerical limitation.’’ 8 See ‘‘Registration Requirement for Petitioners Seeking To File H–1B Petitions on Behalf of CapSubject Aliens,’’ 84 FR 888 (Jan. 31, 2019). E:\FR\FM\23OCP3.SGM 23OCP3 72874 Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules cap season.9 Under the registration requirement, prospective petitioners seeking to file H–1B cap-subject petitions (including petitions filed on behalf of beneficiaries eligible for the advanced degree exemption) must first electronically register and pay the associated H–1B registration fee for each prospective beneficiary. The random selection process is then conducted, selecting from the properly submitted registrations the number of registrations projected as needed to reach the numerical allocations.10 Only those prospective petitioners with selected registrations are eligible to file H–1B cap-subject petitions for the beneficiary(ies) named in their selected registration(s). The electronic registration process has streamlined the H–1B cap selection process by reducing paperwork and simplifying data exchange, and has provided overall cost savings to employers seeking to file H– 1B cap-subject petitions and to USCIS. Prior to the registration requirement, petitioners were required to prepare and file complete H–1B petitions in order to be considered for the random selection process. lotter on DSK11XQN23PROD with PROPOSALS3 2. The F–1 Program Section 101(a)(15)(F)(i) of the INA, 8 U.S.C. 1101(a)(15)(F)(i), permits bona fide students to be temporarily admitted to the United States for the purpose of pursuing a full course of study at an established college, university, seminary, conservatory, academic high school, elementary school, or other academic institution or accredited language training program. Principal applicants are categorized as F–1 nonimmigrants and their spouses and minor children may accompany or follow to join them as F–2 dependents.11 In 1992, legacy Immigration and Naturalization Services (INS) amended its longstanding regulations relating to an employment program for students called Optional Practical Training (OPT) such that students in F–1 nonimmigrant status who have been enrolled on a fulltime basis for at least one full academic year in a college, university, conservatory, or seminary (which now must be certified by U.S. Immigration and Customs Enforcement’s (ICE’s) Student and Exchange Visitor Program (SEVP)) are allowed up to 12 months of OPT to work for a U.S. employer in a job directly related to the student’s 9 Id. 10 See 8 CFR 214.2(h)(8)(iii). INA section 101(a)(15)(F)(i)–(ii), 8 U.S.C. 1101(a)(15)(F)(i)–(ii); 8 CFR 214.2(f)(3). 11 See VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 major area of study.12 Employers of F– 1 students already working for the employer under OPT, would often file petitions to change the students’ status to H–1B so that these nonimmigrant students may continue working in their current or a similar job.13 Many times, however, an F–1 student’s OPT authorization would expire prior to the student being able to assume the employment specified in the approved H–1B petition, creating a gap in employment.14 In order to remedy this, in 2008, DHS created the cap-gap extension to temporarily extend the period of authorized stay, as well as work authorization, of certain F–1 students caught in a gap between the end of their program and the start date on their later-in-time approved, capsubject H–1B petition.15 The cap-gap extension provides a temporary bridge between F–1 and H–1B status, allowing students to remain in the United States between the end of their academic program and the beginning of the fiscal year, when the student’s H–1B status commences.16 DHS subsequently amended cap-gap procedures by extending the authorized period of stay and work authorization of any F–1 student who is the beneficiary of a timely filed cap-subject H–1B petition that has been granted by, or remains pending with, USCIS, until October 1 of the fiscal year for which H–1B visa classification has been requested.17 12 See 8 CFR 214.2(f)(10); ‘‘Pre-Completion Interval Training; F–1 Student Work Authorization,’’ 57 FR 31954 (July 20, 1992). 13 See ‘‘Extending Period of Optional Practical Training by 17 Months for F–1 Nonimmigrant Students With STEM Degrees and Expanding CapGap Relief for All F–1 Students With Pending H– 1B Petitions,’’ 73 FR 18944, 18947 (Apr. 8, 2008), vacated, Wash. All. of Tech. Workers v. U.S. Dep’t of Homeland Sec., 156 F. Supp. 3d 123 (D.D.C. 2015), which amended the cap-gap extension. Through this interim final rule, DHS also made other amendments, such as eliminating the requirement that USCIS issue a Federal Register Notice in order to extend status for students with pending H–1B petitions. Although the 2008 rule was vacated, the cap-gap extension was reinstated through ‘‘Improving and Expanding Training Opportunities for F–1 Nonimmigrant Students With STEM Degrees and Cap-Gap Relief for All Eligible F–1 Students,’’ 81 FR 13039 (Mar. 11, 2016). 14 Id. 15 Id. 16 See ‘‘Improving and Expanding Training Opportunities for F–1 Nonimmigrant Students With STEM Degrees and Cap-Gap Relief for All Eligible F–1 Students,’’ 81 FR 13039 (Mar. 11, 2016). 17 See ‘‘Extending Period of Optional Practical Training by 17 Months for F–1 Nonimmigrant Students With STEM Degrees and Expanding CapGap Relief for All F–1 Students With Pending H– 1B Petitions,’’ 74 FR 26514 (June 3, 2009) (correction); ‘‘Improving and Expanding Training Opportunities for F–1 Nonimmigrant Students With STEM Degrees and Cap-Gap Relief for All Eligible F–1 Students,’’ 81 FR 13039 (Mar. 11, 2016). Through this proposed rule, DHS amended the cap- PO 00000 Frm 00006 Fmt 4701 Sfmt 4702 IV. Discussion of the Proposed Rule A. Modernization and Efficiencies 1. Amending the Definition of a ‘‘Specialty Occupation’’ DHS proposes to revise the regulatory definition and standards for a ‘‘specialty occupation’’ to better align with the statutory definition of that term. Section 101(a)(15)(H)(i)(b) of the INA, 8 U.S.C. 1101(a)(15)(H)(i)(b), describes nonimmigrants coming to the United States temporarily to perform services in a specialty occupation. Section 214(i)(1) of the INA, 8 U.S.C. 1184(i)(1) states that the term ‘‘specialty occupation’’ means: ‘‘an occupation that requires—(A) theoretical and practical application of a body of highly specialized knowledge, and (B) attainment of a bachelor’s or higher degree in the specific specialty (or its equivalent) as a minimum for entry into the occupation in the United States.’’ Currently, 8 CFR 214.2(h)(4)(ii) defines ‘‘specialty occupation’’ as an occupation which requires theoretical and practical application of a body of highly specialized knowledge in fields of human endeavor including, but not limited to, architecture, engineering, mathematics, physical sciences, social sciences, medicine and health, education, business specialties, accounting, law, theology, and the arts, and which requires the attainment of a bachelor’s degree or higher in a specific specialty, or its equivalent, as a minimum for entry into the occupation in the United States. This proposed rule would add language to this definition to codify existing USCIS practice that there must be a direct relationship between the required degree field(s) and the duties of the position; there may be more than one acceptable degree field for a specialty occupation; and a general degree is insufficient.18 Specifically, gap procedures by no longer requiring USCIS to issue a Federal Register notice indicating that the H–1B cap must first be met (or would likely be met) for the current fiscal year. 18 See, e.g., Madkudu Inc., et al., v. U.S. Citizenship and Immigration Services, et al. 5:20– cv–2653–SVK (N.D. Ca. Aug. 20, 2021) Settlement Agreement at 4 (‘‘if the record shows that the petitioner would consider someone as qualified for the position based on less than a bachelor’s degree in a specialized field directly related to the position (e.g., an associate’s degree, a bachelor’s degree in a generalized field of study without a minor, major, concentration, or specialization in market research, marketing, or research methods (see Sections II.C.1.b and c), or a bachelor’s degree in a field of study unrelated to the position), then the position would not meet the statutory and regulatory definitions of specialty occupation at 8 U.S.C. 1184(i)(1) and 8 CFR 214.2(h)(4)(ii).’’), https:// www.uscis.gov/sites/default/files/document/legaldocs/Madkudu-settlement-agreement.pdf (last visited Sep. 5, 2023). E:\FR\FM\23OCP3.SGM 23OCP3 Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules lotter on DSK11XQN23PROD with PROPOSALS3 DHS proposes to add language to the definition of ‘‘specialty occupation’’ clarifying that the required specialized studies must be directly related to the position. DHS also proposes to add language stating that a position is not a specialty occupation if attainment of a general degree, such as business administration or liberal arts, without further specialization, is sufficient to qualify for the position, and that a position may allow a range of degrees or apply multiple bodies of highly specialized knowledge, provided that each of those qualifying degree fields or each body of highly specialized knowledge is directly related to the position. A position for which a bachelor’s degree in any field is sufficient to qualify for the position, or for which a bachelor’s degree in a wide variety of fields unrelated to the position is sufficient to qualify, would not be considered a specialty occupation as it would not require the application of a body of highly specialized knowledge.19 Similarly, the amended definition clarifies that a position would not qualify as a specialty occupation if attainment of a general degree, without further specialization, is sufficient to qualify for the position.20 The burden of proof is on the petitioner to demonstrate that each qualifying degree field is directly related to the position. This is consistent with the statutory requirement that a degree be ‘‘in the specific specialty’’ and is USCIS’ longstanding practice. Under this proposed addition to 8 CFR 214.2(h)(4)(ii), the petitioner would continue to have the burden of 19 See Caremax Inc v. Holder, 40 F. Supp. 3d 1182, 1187–88 (N.D. Cal. 2014). 20 Although a general-purpose bachelor’s degree, such as a degree in business or business administration, may be a legitimate prerequisite for a particular position, requiring such a degree, without more, will not justify a conclusion that a particular position qualifies for classification as a specialty occupation. See, e.g., Royal Siam Corp., 484 F.3d 139, 147 (1st Cir. 2007) (‘‘The courts and the agency consistently have stated that, although a general-purpose bachelor’s degree, such as a business administration degree, may be a legitimate prerequisite for a particular position, requiring such a degree, without more, will not justify the granting of a petition for an H–1B specialty occupation visa.’’); Shanti, Inc. v. Reno, 36 F. Supp. 2d 1151, 1162–1164 (D. Minn. 1999) (the former INS did not depart from established policy or precedent when concluding that a general degree, such as a business administration degree, without more, does not constitute a degree in a specialized field); Raj & Co. v. USCIS, 85 F. Supp. 3d 1241, 1246 (W.D. Wash. 2015) (it is ‘‘well-settled in the case law and USCIS’s reasonable interpretations of the regulatory framework’’ that ‘‘a generalized bachelor[’s] degree requirement is [in]sufficient to render a position sufficiently specialized to qualify for H–1B status.’’); Vision Builders, LLC v. USCIS, No. 19– CV–3159, 2020 WL 5891546, at *6 (D.D.C. Oct. 5, 2020) (citing Raj). VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 demonstrating that there is a direct relationship between the required degree in a specific specialty (in other words, the degree field(s) that would qualify someone for the position) and the duties of the position. In many cases, the relationship will be clear and relatively easy to establish. For example, it should not be difficult to establish that a required medical degree is directly related to the duties of a physician. Similarly, a direct relationship may readily be established between the duties of a lawyer and a required law degree and the duties of an architect and a required architecture degree. In other cases, the direct relationship may be less apparent, and the petitioner may have to explain and provide documentation to meet its burden of demonstrating the relationship. As in the past, to establish a direct relationship, the petitioner would need to provide information regarding the course(s) of study associated with the required degree, or its equivalent, and the duties of the proffered position, and demonstrate the connection between the course of study and the duties and responsibilities of the position. The requirement of a direct relationship between a degree in a specific specialty, or its equivalent, and the position, however, should not be construed as requiring a singular field of study.21 For example, for the position of electrical engineer, a degree in electrical engineering or electronics engineering may qualify a person for the position, and therefore a minimum of a bachelor’s or higher degree, or its equivalent, in more than one field of study may be recognized as satisfying the ‘‘degree in the specific specialty (or its equivalent)’’ requirement of section 214(i)(1)(B) of the INA, 8 U.S.C. 1184(i)(1)(B). In such a case, the ‘‘body of highly specialized knowledge’’ required by section 214(i)(1)(A) of the INA, 8 U.S.C. 1184(i)(1)(A), would be afforded by either degree, and each field of study accordingly would be in a ‘‘specific specialty’’ directly related to the position consistent with section 214(i)(1)(B) of the INA, 8 U.S.C. 1184(i)(1)(B). In cases where the petitioner lists degrees in multiple disparate fields of study as the minimum entry 21 See, e.g., Relx, Inc. v. Baran, 397 F. Supp. 3d 41, 54 (D.D.C. 2019) (‘‘There is no requirement in the statute that only one type of degree be accepted for a position to be specialized.’’); Residential Fin. Corp. v. U.S. Citizenship & Immigration Servs., 839 F. Supp. 2d 985, 997 (S.D. Ohio 2012) (stating that when determining whether a position is a specialty occupation, ‘‘knowledge and not the title of the degree is what is important’’). PO 00000 Frm 00007 Fmt 4701 Sfmt 4702 72875 requirement for a position, the petitioner has the burden of establishing how each field of study is in a specific specialty providing ‘‘a body of highly specialized knowledge’’ directly related to the duties and responsibilities of the particular position. The petitioner must show that its position meets the requirements of sections 214(i)(1)(A) and (B) of the INA, 8 U.S.C. 1184(i)(1)(A) and (B), and the regulatory definition.22 As such, under this proposed rule, a minimum entry requirement of a bachelor’s or higher degree, or its equivalent, in multiple disparate fields of study would not automatically disqualify a position from being a specialty occupation. For example, a petitioner may be able to establish that a bachelor’s degree in the specific specialties of either education or chemistry, each of which provide a body of highly specialized knowledge, is directly related to the duties and responsibilities of a chemistry teacher. In such a scenario, the ‘‘body of highly specialized knowledge’’ requirement of section 214(i)(1)(A) of the INA, 8 U.S.C. 1184(i)(1)(A), and the ‘‘degree in the specific specialty’’ requirement of section 214(i)(1)(B) of the INA, 8 U.S.C. 1184(i)(1)(B), would both be met by either degree and the chemistry teacher position listing multiple disparate fields of study would qualify as a specialty occupation. In determining whether a position involves a specialty occupation, USCIS currently interprets the ‘‘specific specialty’’ requirement in section 214(i)(1)(B) of the INA, 8 U.S.C. 1184(i)(1)(B), to relate back to the body of highly specialized knowledge requirement referenced in section 214(i)(1)(A) of the INA, 8 U.S.C. 1184(i)(1)(A), required by the specialty occupation in question. The ‘‘specific specialty’’ requirement is only met if the degree in a specific specialty or specialties, or its equivalent, provides a body of highly specialized knowledge directly related to the duties and responsibilities of the particular position as required by section 214(i)(1)(A) of the INA, 8 U.S.C. 1184(i)(1)(A). If the minimum entry requirement for a position is a general degree without further specialization or an explanation of what type of degree is required, the ‘‘degree in the specific specialty (or its equivalent)’’ requirement of INA section 214(i)(1)(B), 8 U.S.C. 1184(i)(1)(B), 22 The petitioner must also establish that its position meets one of the four criteria at proposed 8 CFR 214.2(h)(4)(iii)(A), which is explained in detail below. E:\FR\FM\23OCP3.SGM 23OCP3 72876 Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules would not be satisfied. For example, a requirement of a general business degree for a marketing position would not satisfy the specific specialty requirement. In this instance, the petitioner would not satisfactorily demonstrate how a required general business degree provides a body of highly specialized knowledge that is directly related to the duties and responsibilities of a marketing position.23 Similarly, a petition with a requirement of any engineering degree in any field of engineering for a position of software developer would generally not satisfy the statutory requirement, as it is unlikely the petitioner could establish how the fields of study within any engineering degree provide a body of highly specialized knowledge directly relating to the duties and responsibilities of the software developer position.24 If an individual could qualify for a petitioner’s software developer position based on having a seemingly unrelated engineering degree, then it cannot be concluded that the position requires the application of a body of highly specialized knowledge and a degree in a specific specialty, because someone with an entirely or largely unrelated degree may qualify to perform the job.25 In such a scenario, the requirements of INA sections 214(i)(1)(A) and (B), 8 U.S.C. 1184(i)(1)(A) and (B), would not be satisfied. Further, if a position requires a bachelor’s degree in an unspecified ‘‘quantitative field’’ (which could include mathematics, statistics, economics, accounting, or physics) the petitioner must identify specific specialties, such as the majors or degree fields, within the wide variety of ‘‘quantitative fields’’ and establish how each identified degree in a specific specialty provides a body of highly specialized knowledge, consistent with INA section 214(i)(1)(A), 8 U.S.C. 1184(i)(1)(A), that is directly related to the duties and responsibilities of the 23 See Royal Siam Corp., 484 F.3d at 147. requirement of any engineering degree could include, for example, a chemical engineering degree, marine engineering degree, mining engineering degree, or any other engineering degree in a multitude of seemingly unrelated fields. 25 These examples refer to the educational credentials by the title of the degree for expediency. However, USCIS separately evaluates whether the beneficiary’s actual course of study is directly related to the duties of the position, rather than merely the title of the degree. When applicable, USCIS also will consider whether the beneficiary has the education, specialized training, and/or progressively responsible experience that is equivalent to completion of a U.S. baccalaureate or higher degree in the specialty occupation. See 8 CFR 214.2(h)(4)(iii)(C)(4). lotter on DSK11XQN23PROD with PROPOSALS3 24 The VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 software developer position. While a position may allow a range of degrees, and apply multiple bodies of highly specialized knowledge, each of those qualifying degree fields or each body of highly specialized knowledge must be directly related to the proffered position. 2. Amending the Criteria for Specialty Occupation Positions Under INA section 214(i)(1), 8 U.S.C. 1184(i)(1), a ‘‘specialty occupation’’ requires attainment of a bachelor’s or higher degree in the specific specialty (or its equivalent) as a minimum for entry into the occupation in the United States. The current regulatory criteria at 8 CFR 214.2(h)(4)(iii)(A)(1) states that a bachelor’s degree is ‘‘normally’’ required. To provide additional guidance to adjudicators, attorneys, and the public, DHS is proposing to define the term ‘‘normally’’ at proposed 8 CFR 214.2(h)(4)(iii)(A)(5) to state that, for purposes of the criteria in this provision, ‘‘normally’’ means ‘‘conforming to a type, standard, or regular pattern’’ and is ‘‘characterized by that which is considered usual, typical, common, or routine.’’ 26 The proposed regulation also clarifies that ‘‘[n]ormally does not mean always.’’ For these purposes, there is no significant difference between the synonyms ‘‘normal,’’ ‘‘usual,’’ ‘‘typical,’’ ‘‘common,’’ or ‘‘routine.’’ 27 These synonyms illustrate that a description of an occupation that uses a synonym for the word ‘‘normally’’ in describing whether a bachelor’s or higher degree is required for the occupation can support a finding that a degree is ‘‘normally’’ required. By the same token, other synonyms for the word ‘‘normally’’ that are not listed in proposed 8 CFR 214.2(h)(4)(iii)(A)(5), such as ‘‘mostly’’ or ‘‘frequently,’’ also can support a finding that a degree is ‘‘normally’’ required. This proposed change clarifies that the petitioner does not have to establish that the bachelor’s degree in a specific specialty or its equivalent is always a minimum requirement for entry into the occupation in the United States. This is consistent with both USCIS’s current practice, as reflected by the statement on the USCIS website that ‘‘normally,’’ ‘‘common,’’ and ‘‘usually’’ are not interpreted to mean ‘‘always,’’ 28 26 See Merriam-Webster Dictionary at https:// www.merriam-webster.com/dictionary/normal (last visited Aug. 24, 2023). 27 See Innova, 983 F.3d at 432 (‘‘There is no daylight between typically needed, per the OOH, and normally required, per the regulatory criteria. ‘Typically’ and ‘normally’ are synonyms.’’). 28 See USCIS, ‘‘H–1B Specialty Occupations, DOD Cooperative Research and Development Project PO 00000 Frm 00008 Fmt 4701 Sfmt 4702 and USCIS’s rescission of a 2017 policy memorandum guiding officers on the interpretation of the Occupational Outlook Handbook’s with respect to the computer programmer occupation.29 USCIS rescinded the 2017 policy memorandum following the decision of the U.S. Court of Appeals for the Ninth Circuit in Innova Solutions v. Baran, 983 F.3d 428 (9th Cir. 2020).30 As the court stated in Innova, ‘‘the fact that some computer programmers are hired without a bachelor’s degree is entirely consistent with a bachelor’s degree ‘normally [being] the minimum requirement for entry.’ ’’ 31 USCIS currently applies this same rationale to other occupations. By proposing to codify USCIS’s current practice at proposed 8 CFR 214.2(h)(4)(iii)(A)(5), DHS seeks to provide H–1B petitioners with more certainty as to what adjudication standards apply to their petitions. In addition, DHS proposes to codify its current practices by revising the criteria for a specialty occupation at current 8 CFR 214.2(h)(4)(iii)(A). First, DHS proposes to replace the phrase ‘‘To qualify as a specialty occupation, the position must meet one of the following criteria’’ with ‘‘A position does not meet the definition of specialty occupation in paragraph (h)(4)(ii) of this section unless it also satisfies at least one of the following criteria at paragraphs (h)(4)(iii)(A)(1) through (4) of this section.’’ This proposed change would clarify that meeting one of the regulatory criteria is a necessary part of—but not always sufficient for— demonstrating that a position qualifies as a specialty occupation. This is not new; the criteria at current 8 CFR 214.2(h)(4)(iii)(A) must be construed in harmony with and in addition to other controlling regulatory provisions and Workers, and Fashion Models,’’ https:// www.uscis.gov/working-in-the-united-states/h-1bspecialty-occupations (last updated Feb. 8, 2023). 29 See USCIS, ‘‘Rescission of 2017 Policy Memorandum PM–602–0142,’’ PM–602–0142.1, https://www.uscis.gov/sites/default/files/document/ memos/PM-602-0142.1_RescissionOfPM-6020142.pdf (Feb. 3, 2021). 30 The 2017 memorandum instructed officers not to ‘‘generally consider the position of [computer] programmer to qualify as a specialty occupation,’’ specifically where the proffered position did not have a minimum entry requirement of a U.S. bachelor’s or higher and indicated that the petitioner must provide other evidence to establish that the particular position is one in a specialty occupation. See USCIS, Recission of the December 22, 2000 ‘‘Guidance memo on H1B computer related positions’’, PM–602–0142, https:// www.uscis.gov/sites/default/files/document/ memos/PM-6002-0142-H-1BComputerRelated PositionsRecission.pdf (Mar. 31, 2017). 31 See Innova, 983 F.3d at 432 (emphasis in original). E:\FR\FM\23OCP3.SGM 23OCP3 Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules lotter on DSK11XQN23PROD with PROPOSALS3 with the statute as a whole.32 In 2000, the U.S. Court of Appeals for the Fifth Circuit highlighted the ambiguity of the regulatory provision’s current wording, and petitioners have misinterpreted the criteria in 8 CFR 214.2(h)(4)(iii)(A) as setting forth both the necessary and sufficient conditions to qualify as a specialty occupation, a reading that resulted in some positions meeting one condition of 8 CFR 214.2(h)(4)(iii)(A), but not the definition as a whole.33 These proposed changes would eliminate this source of confusion. DHS is also proposing to amend 8 CFR 214.2(h)(4)(iii)(A)(1) by adding ‘‘U.S.’’ to ‘‘baccalaureate,’’ and replacing the word ‘‘position’’ with ‘‘occupation,’’ so that it sets forth ‘‘the minimum requirement for entry into the particular occupation in which the beneficiary will be employed.’’ See proposed 8 CFR 214.2(h)(4)(iii)(A)(1). Adding ‘‘U.S.’’ clarifies that a baccalaureate degree must be a U.S. degree (or its foreign equivalent), and that a foreign baccalaureate is not necessarily an equivalent. DHS is proposing this change to codify longstanding practice and to reflect a consistent standard that will align the regulation discussing the position requirement at 8 CFR 214.2(h)(4)(iii)(A)(1) with the statutory requirement of ‘‘a bachelor’s or higher degree in the specific specialty (or its equivalent) as a minimum for entry into the occupation in the United States’’ at INA section 214(i)(1)(B), 8 U.S.C. 1184(i)(1)(B), as well as the regulatory requirement that an H–1B beneficiary must have the equivalent of a U.S. 32 Numerous AAO non-precedent decisions spanning several decades have explained that the criteria at 8 CFR 214.2(h)(4)(iii)(A) must logically be read together with section 214(i)(1) of the Act and 8 CFR 214.2(h)(4)(ii), and that the regulatory criteria must be construed in harmony with the thrust of the related provisions and with the statute as a whole. See, e.g., In Re. ---, 2009 WL 4982420 (AAO Aug. 21, 2009); In Re. ---, 2009 WL 4982607 (AAO Sept. 3, 2009); In Re. 15542, 2016 WL 929725 (AAO Feb. 22, 2016); In Re. 17442092, 2021 WL 4708199 (AAO Aug. 11, 2021); In Re. 21900502, 2022 WL 3211254 (AAO July 7, 2022). 33 See Defensor v. Meissner, 201 F.3d 384, 387 (5th Cir. 2000) (stating that current 8 CFR 214.2(h)(4)(iii)(A) ‘‘appears to implement the statutory and regulatory definition of specialty occupation through a set of four different standards. However, this section might also be read as merely an additional requirement that a position must meet, in addition to the statutory and regulatory definition. The ambiguity stems from the regulation’s use of the phrase ‘to qualify as.’ In common usage, this phrase suggests that whatever conditions follow are both necessary and sufficient conditions. Strictly speaking, however, the language logically entails only that whatever conditions follow are necessary conditions. . . . If § 214.2(h)(4)(iii)(A) is read to create a necessary and sufficient condition for being a specialty occupation, the regulation appears somewhat at odds with the statutory and regulatory definitions of ‘specialty occupation.’ ’’). VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 baccalaureate degree at 8 CFR 214.2(h)(4)(iii)(C)(1). Replacing ‘‘position’’ with ‘‘occupation’’ would clarify that the first criterion can be satisfied if the petitioner can show that its position falls within an occupational category for which all positions within that category have a qualifying minimum degree requirement.34 This revision would provide added clarity to the regulatory criteria as the criteria would flow from general to specific (i.e., occupation level to industry to employer to position). If the occupation requires at least a bachelor’s degree in a specific specialty (e.g., architect or aeronautical engineer) then it necessarily follows that a position in one of those occupations would require a degree and qualify as a specialty occupation. If the occupation does not require at least a bachelor’s degree in a specific specialty, then the petitioner could submit evidence to show that at least a bachelor’s degree in a specific specialty (or its equivalent) is required based on U.S. industry norms, the employer’s particular requirement, or because of the particulars of the specific position. See proposed 8 CFR 214.2(h)(4)(iii)(A)(2) through (4). USCIS will continue its practice of consulting the U.S. Department of Labor’s (DOL’s) Occupational Outlook Handbook and other reliable and informative sources submitted by the petitioner, to assist in its determination regarding the minimum entry requirements for positions located within a given occupation. DHS further proposes to amend 8 CFR 214.2(h)(4)(iii)(A)(2) by consolidating this criterion’s second prong into the fourth criterion. See proposed 8 CFR 214.2(h)(4)(iii)(A)(2). The second prong of current 8 CFR 214.2(h)(4)(iii)(A)(2), which focuses on a position’s complexity or uniqueness, is similar to current 8 CFR 214.2(h)(4)(iii)(A)(4), which focuses on a position’s complexity and specialization. In practice, they are frequently consolidated into the same analysis. This amendment would streamline both criteria, as well as the explanation and analysis in written decisions issued by USCIS pertaining to specialty occupation determinations, as such decisions discuss all four criteria and are necessarily repetitive because of the existing overlap between 8 CFR 214.2(h)(4)(iii)(A)(2) and (4). This amendment would also simplify the analysis because petitioners may 34 DHS generally determines a position’s occupation or occupational category by looking at the standard occupational classification (SOC) code designated on the LCA. PO 00000 Frm 00009 Fmt 4701 Sfmt 4702 72877 demonstrate eligibility under this criterion if the position is ‘‘so specialized, complex, or unique’’, as opposed to ‘‘so complex or unique’’ under current 8 CFR 214.2(h)(4)(iii)(A)(2) and ‘‘so specialized and complex’’ under current 8 CFR 214.2(h)(4)(iii)(A)(4) (emphasis added). Notwithstanding these amendments, the analytical framework of the first prong of proposed 8 CFR 214.2(h)(4)(iii)(A)(2) generally would remain the same. Thus, a petitioner would satisfy proposed 8 CFR 214.2(h)(4)(iii)(A)(2) if it demonstrates that the specialty degree requirement is normally the minimum entry requirement for: (1) parallel positions; (2) at similar organizations; (3) within the employer’s industry in the United States. This criterion is intended for the subset of positions with minimum entry requirements that are determined not necessarily by occupation, but by specific industry standards. For this criterion, DHS would continue its practice of consulting DOL’s Occupational Outlook Handbook and other reliable and informative sources, such as information from the industry’s professional association or licensing body, submitted by the petitioner. USCIS proposes to change the third criterion at proposed 8 CFR 214.2(h)(4)(iii)(A)(3), in part, from stating that the employer normally requires a ‘‘degree or its equivalent for the position’’ to stating that the employer normally requires a ‘‘U.S. baccalaureate or higher degree in a directly related specific specialty, or its equivalent, for the position.’’ The additional phrase about a ‘‘degree in a directly related specific specialty’’ would reinforce the existing requirements for a specialty occupation, in other words, that the position itself must require a directly related specialty degree, or its equivalent, to perform its duties. See also proposed 8 CFR 214.2(h)(4)(iii)(A)(3). Employers requiring degrees as a proxy for a generic set of skills would not meet this standard. Employers listing a specialized degree as a hiring preference would not meet this standard either. If USCIS were constrained to recognize a position as a specialty occupation merely because an employer has an established practice of demanding certain educational requirements for the offered position—without consideration of whether the position actually requires the application of a body of highly specialized knowledge consistent with the degree requirement—then any beneficiary with a bachelor’s degree in a specific specialty could be brought E:\FR\FM\23OCP3.SGM 23OCP3 72878 Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules lotter on DSK11XQN23PROD with PROPOSALS3 into the United States to perform work in a non-specialty occupation if the employer arbitrarily imposed such a degree requirement for the non-specialty occupation position.35 With respect to an employer’s normal employment practices, a petitioner could submit evidence of an established recruiting and hiring practice to establish its requirements for the position. Keeping the word ‘‘normally’’ in this criterion is intended to preserve flexibility for petitioners, although petitioners seeking to fill a position for the first time generally would not be able to demonstrate an established practice.36 Furthermore, DHS proposes to add ‘‘or third party if the beneficiary will be staffed to that third party’’ to proposed 8 CFR 214.2(h)(4)(iii)(A)(3) 37 to clarify that it is the third party’s requirements, not the petitioning employer’s, that are most relevant if the beneficiary would be staffed to a third party. This change would be consistent with proposed 8 CFR 214.2(h)(4)(i)(B)(3), which clarifies that when a beneficiary is staffed to a third party, it is the requirements of that third party, and not the petitioner, that are most relevant when determining whether the position is a specialty occupation. This proposed revision would define ‘‘staffed’’ in the same way to mean that the beneficiary would be contracted to fill a position in the third party’s organization. The criterion at proposed 8 CFR 214.2(h)(4)(iii)(A)(4) incorporates the second prong of current 8 CFR 214.2(h)(4)(iii)(A)(2). See proposed 8 CFR 214.2(h)(4)(iii)(A)(4). DHS proposes no other substantive changes to this criterion. Thus, the fourth criterion could be satisfied if the petitioner demonstrates that the proffered position’s job duties are so specialized, complex, or unique that they necessitate the attainment of a U.S. bachelor’s degree in a directly related specific specialty, or its equivalent. 35 See Defensor, 201 F.3d at 388 (noting ‘‘If only [the employer]’s requirements could be considered, then any alien with a bachelor’s degree could be brought into the United States to perform a nonspecialty occupation, so long as that person’s employment was arranged through an employment agency which required all clients to have bachelor’s degrees. Thus, aliens could obtain six year visas for any occupation, no matter how unskilled, through the subterfuge of an employment agency. This result is completely opposite the plain purpose of the statute and regulations, which is to limit H1– B [sic] visas to positions which require specialized experience and education to perform.’’). 36 First-time hirings are not precluded from qualifying under one of the other criteria. 37 The full proposed regulation would read: ‘‘The employer, or third party if the beneficiary will be staffed to that third party, normally requires a U.S. baccalaureate or higher degree in a directly related specific specialty, or its equivalent, for the position.’’ VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 3. Amended Petitions DHS proposes to clarify when an amended or new H–1B petition must be filed due to a change in an H–1B worker’s place of employment. Specifically, this rule proposes to clarify that any change of work location that requires a new LCA is itself considered a material change and therefore requires the petitioning employer to file an amended or new petition with USCIS before the H–1B worker may perform work under the changed conditions. Further, DHS proposes to consolidate and clarify guidance on when an amended or new petition is required for short-term placement of H–1B workers at a worksite not listed on the approved petition or corresponding LCA.38 These proposed changes are not intended to depart from existing regulations and guidance, but rather, seek to consolidate existing requirements and make clear when a petitioner must submit an amended or new petition. DHS regulations already require that petitioning employers file an amended or new H–1B petition for all situations involving a material change to the conditions of H–1B employment. Specifically, 8 CFR 214.2(h)(2)(i)(E) states that a ‘‘petitioner shall file an amended or new petition, with fee, with the Service Center where the original petition was filed to reflect any material changes in the terms and conditions of employment or training or the alien’s eligibility as specified in the original approved petition.’’ That regulation goes on to add that if the amended or new petition is an H–1B petition, a new LCA must accompany the petition. Additionally, 8 CFR 214.2(h)(11)(i)(A) requires a petitioner to ‘‘immediately notify’’ USCIS of a change in the terms and conditions of employment of a beneficiary which may affect eligibility for H–1B status. However, USCIS seeks to clarify when an amended or new petition must be filed or when a petitioner need not file an amended petition. To find relevant requirements, H–1B petitioners and USCIS officers currently must look to various sources, including USCIS policy guidance, DOL regulations, and DOL guidance. DHS seeks to make its regulations relating to amended or new H–1B petitions more comprehensive and useful by incorporating relevant requirements into proposed 8 CFR 214.2(h)(2)(i)(E)(2). 38 See USCIS, ‘‘USCIS Final Guidance on When to File an Amended or New H–1B Petition After Matter of Simeio Solutions, LLC,’’ PM–602–0120 (July 21, 2015), https://www.uscis.gov/sites/default/ files/document/memos/2015-0721_Simeio_ Solutions_Transition_Guidance_Memo_Format_7_ 21_15.pdf. PO 00000 Frm 00010 Fmt 4701 Sfmt 4702 Under 8 CFR 214.2(h)(4)(i)(B), an H– 1B petition for a specialty occupation worker must include a certified LCA from DOL. DOL regulation at 20 CFR 655.731 provides details on the LCA requirements, including that an employer seeking to employ an H–1B worker in a specialty occupation must attest on the LCA that it will pay the H– 1B worker the required wage rate. The required wage rate is the higher of either the prevailing wage 39 for the occupational classification, or the actual wage paid by the employer to similarly situated employees, in the geographic area of intended employment.40 The LCA seeks to protect U.S. workers and their wages by disincentivizing hiring foreign workers at lower wages. A key component to filing an LCA is determining the appropriate wage to list on the application. Generally, a petitioning employer is not required to use any specific methodology to determine the prevailing wage and may utilize a wage obtained from the Office of Foreign Labor Certification, an independent authoritative source, or other legitimate sources of wage data.41 While there are many factors that may be considered when determining the prevailing wage, one of the most significant is the geographic area where the H–1B worker will perform their duties. Because prevailing wages differ, often significantly, from location to location, a change in geographic area of intended employment that goes beyond the current metropolitan statistical area 39 20 CFR 655.731(a)(2)(ii) states that, if the job opportunity is not covered by a collective bargaining agreement, the prevailing wage shall be the arithmetic mean of the wages of workers similarly employed, except that the prevailing wage shall be the median when provided by paragraphs (a)(2)(ii)(A), (b)(3)(iii)(B)(2), and (b)(3)(iii)(C)(2) of 20 CFR 655.731. An employer is not permitted to pay a wage that is lower than a wage required under any other applicable Federal, State or local law. 40 Pursuant to 20 CFR 655.715, ‘‘Area of intended employment’’ means the area within normal commuting distance of the place (address) of employment where the H–1B nonimmigrant is or will be employed. There is no rigid measure of distance which constitutes a normal commuting distance or normal commuting area, because there may be widely varying factual circumstances among different areas (e.g., normal commuting distances might be 20, 30, or 50 miles). If the place of employment is within a Metropolitan Statistical Area (MSA) or a Primary Metropolitan Statistical Area (PMSA), any place within the MSA or PMSA is deemed to be within normal commuting distance of the place of employment; however, all locations within a Consolidated Metropolitan Statistical Area (CMSA) will not automatically be deemed to be within normal commuting distance. The borders of MSAs and PMSAs are not controlling with regard to the identification of the normal commuting area; a location outside of an MSA or PMSA (or a CMSA) may be within normal commuting distance of a location that is inside (e.g., near the border of) the MSA or PMSA (or CMSA). 41 See 20 CFR 655.731(a)(2). E:\FR\FM\23OCP3.SGM 23OCP3 Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules lotter on DSK11XQN23PROD with PROPOSALS3 (MSA) often will have an impact on the prevailing wage, requiring a new LCA. In its precedent decision Matter of Simeio Solutions, LLC, 26 I&N Dec. 542 (AAO 2015), USCIS’s Administrative Appeals Office (AAO) held that a change in geographic area of employment that would require a new LCA is considered a material change for purposes of 8 CFR 214.2(h)(2)(i)(E) and (h)(11)(i)(A) because the new LCA may impact eligibility under 8 CFR 214.2(h)(4)(i)(B)(1). For example, a change in location may impact eligibility if the new location is in an MSA with a higher wage. USCIS provided additional guidance implementing Matter of Simeio Solutions in July 2015 in its policy memorandum ‘‘USCIS Final Guidance on When to File an Amended or New H–1B Petition After Matter of Simeio Solutions, LLC.’’ 42 In proposed 8 CFR 214.2(h)(2)(i)(E)(2), DHS proposes to specify that ‘‘Any change in the place of employment to a geographical area that requires a corresponding labor condition application to be certified to USCIS is considered a material change and requires an amended or new petition to be filed with USCIS before the H–1B worker may begin work at the new place of employment.’’ Further, DHS proposes to specify in proposed 8 CFR 214.2(h)(2)(i)(E)(2) that ‘‘[t]he amended or new petition must be properly filed before the material change(s) takes place’’. This would codify current USCIS practice as articulated in its policy memorandum ‘‘USCIS Final Guidance on When to File an Amended or New H–1B Petition After Matter of Simeio Solutions, LLC,’’ which discusses the ‘‘USCIS position that H– 1B petitioners are required to file an amended or new petition before placing an H–1B employee at a new place of employment not covered by an existing, approved H–1B petition.’’ As with current USCIS practice, proposed 8 CFR 214.2(h)(2)(i)(E)(2) would allow the worker to begin working under the materially changed terms and conditions of employment upon the filing of the amended or new petition, assuming all other requirements and 42 See USCIS, ‘‘USCIS Final Guidance on When to File an Amended or New H–1B Petition After Matter of Simeio Solutions, LLC,’’ PM–602–0120 (July 21, 2015), https://www.uscis.gov/sites/default/ files/document/memos/2015-0721_Simeio_ Solutions_Transition_Guidance_Memo_Format_7_ 21_15.pdf. VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 terms of eligibility are met. They would not need to wait for a final decision on the amended or new petition in order to begin working if eligible in accordance with existing portability provisions at 8 CFR 214.2(h)(2)(i)(H). If while the amended or new petition is pending adjudication another material change occurs, an employer must file another amended or new petition to account for the new changes.43 If that amended or new petition is denied, the H–1B worker generally may return to the position and worksite listed on the most recently approved petition as long as that petition and corresponding LCA are still valid.44 Proposed 8 CFR 214.2(h)(2)(i)(E)(2) would also set forth limited circumstances in which a change to the beneficiary’s place of employment would not require the petitioner to file an amended petition. Proposed 8 CFR 214.2(h)(2)(i)(E)(2)(i) states that moving a beneficiary to a new job location within the same area of intended employment as listed on the LCA would not require an amended petition, assuming there are no other material changes. This would be consistent with INA section 212(n)(4), which provides that a change in the worksite location within the same MSA of the existing LCA would generally be deemed to be within the area of employment.45 Note that proposed 8 CFR 214.2(h)(2)(i)(E)(2)(i) does not purport to set forth all relevant DOL requirements, such as the requirement that the petitioning employer post notice of the LCA, either electronically or in hardcopy, in the new work location on or before the date that the H–1B worker performs any work at the new location.46 Additionally, proposed 8 CFR 214.2(h)(2)(i)(E)(2)(ii) would set forth the specific durations for short-term placements that would not require an amended or new petition, assuming there are no other material changes. This would be consistent with DOL regulations at 20 CFR 655.735 in which short-term placements of less than 30 43 See id. at 7. id. 45 See also 20 CFR 655.734; DOL, Wage and Hour Division, ‘‘Fact Sheet #62J: What does ‘place of employment’ mean?’’ (July 2008), https:// www.dol.gov/agencies/whd/fact-sheets/62j-h1bworksite (‘‘The employer need not obtain a new LCA for another worksite within the geographic area of intended employment where the employer already has an existing LCA for that area.’’). 46 See 20 CFR 655.734(a)(2). 44 See PO 00000 Frm 00011 Fmt 4701 Sfmt 4702 72879 days, or in some cases 60 days, do not require a new LCA or an amended or new petition, provided there are no material changes. Proposed 8 CFR 214.2(h)(2)(i)(E)(2)(iii) would clarify that an amended or new petition would not be required when a beneficiary is going to a non-worksite location to participate in employee development, will be spending little time at any one location, or will perform a peripatetic job. Proposed 8 CFR 214.2(h)(2)(i)(E)(2)(iii) provides examples of ‘‘peripatetic jobs’’ including situations where the job is primarily at one location, but the beneficiary occasionally travels for short periods to other locations on a casual, short-term basis, which can be recurring but not excessive (i.e., not exceeding 5 consecutive workdays for any one visit by a peripatetic worker, or 10 consecutive workdays for any one visit by a worker who spends most work time at one location and travels occasionally to other locations). Proposed 8 CFR 214.2(h)(2)(i)(E)(2)(iii) would be consistent with DOL regulations at 20 CFR 655.715, which sets forth several criteria for what would not constitute a ‘‘place of employment’’ or ‘‘worksite,’’ as well as what would constitute an ‘‘employee developmental activity,’’ for purposes of requiring a new LCA. Note that proposed 8 CFR 214.2(h)(2)(i)(E)(2) would not codify all relevant considerations related to when to file an amended petition. Stakeholders should still consult DOL regulations and policy guidance when considering if an amended petition is necessary. Nevertheless, DHS believes its proposed changes to 8 CFR 214.2(h)(2)(i)(E)(2) would still be beneficial by providing additional clarity about when a change in an H–1B worker’s place of employment constitutes a material change requiring an amended or new petition. DHS proposes to revise and redesignate current 8 CFR 214.2(h)(2)(i)(E) as proposed 8 CFR 214.2(h)(2)(i)(E)(1) so that this provision would be applicable to all H classifications, while proposed 8 CFR 214.2(h)(2)(i)(E)(2) would be specific to H–1B nonimmigrants. In proposed 8 CFR 214.2(h)(2)(i)(E)(1), DHS proposes minor changes to clarify that an amended or new H–1B petition requires a current or new certified labor condition application. E:\FR\FM\23OCP3.SGM 23OCP3 72880 Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules lotter on DSK11XQN23PROD with PROPOSALS3 4. Deference DHS seeks to codify and clarify its existing deference policy at proposed 8 CFR 214.1(c)(5). Deference helps promote consistency and efficiency for both USCIS and its stakeholders. The deference policy instructs officers to consider prior determinations involving the same parties and facts, when there is no material error with the prior determination, no material change in circumstances or in eligibility, and no new material information adversely impacting the petitioner’s, applicant’s, or beneficiary’s eligibility. Through this proposed regulation, DHS seeks to clarify when petitioners may expect adjudicators to exercise deference in reviewing their petitions, so petitioners will be more likely to submit necessary, relevant supporting evidence. This creates predictability for petitioners and beneficiaries and leads to fairer and more reliable outcomes. Codifying and clarifying when USCIS gives deference would also better ensure consistent adjudications. In 2004, USCIS issued a memorandum discussing the significance of prior USCIS adjudications.47 The memorandum acknowledged that USCIS is not bound to approve subsequent petitions or applications where eligibility has not been demonstrated merely because of a prior approval, which may have been erroneous. Nevertheless, where there has been no material change in the underlying facts, the memorandum specified that adjudicators should defer to a prior determination involving the same parties and underlying facts unless there was a material error, a substantial change in circumstances, or new material information that adversely impacts eligibility. On October 23, 2017, USCIS rescinded that guidance, expressing concern that the 2004 memorandum shifted the burden from a petitioner to USCIS.48 Rather than attempt to address any perceived concerns, the 2017 memorandum rescinded the 2004 policy entirely. On April 27, 2021, USCIS incorporated its deference policy into the USCIS Policy Manual, acknowledging that adjudicators are not required to approve subsequent petitions or applications where eligibility has not been 47 See USCIS, ‘‘The Significance of a Prior CIS Approval of a Nonimmigrant Petition in the Context of a Subsequent Determination Regarding Eligibility for Extension of Petition Validity,’’ HQPRD 72/11.3 (Apr. 23, 2004). 48 See USCIS, ‘‘Rescission of Guidance Regarding Deference to Prior Determinations of Eligibility in the Adjudication of Petitions for Extension of Nonimmigrant Status,’’ PM–602–0151 (Oct. 23, 2017). VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 demonstrated strictly because of a prior approval (which may have been erroneous), but stressing that they should defer to prior determinations involving the same parties and underlying facts.49 As stated in the USCIS Policy Manual, deviation from a previous approval carries important consequences and implicates predictability and consistency concerns.50 Consistent with current guidance in the USCIS Policy Manual, proposed 8 CFR 214.1(c)(5) would provide that when adjudicating a request filed on Form I–129 involving the same parties and the same underlying facts, USCIS gives deference to its prior determination of the petitioner’s, applicant’s, or beneficiary’s eligibility. However, USCIS need not give deference to a prior approval if: there was a material error involved with a prior approval; there has been a material change in circumstances or eligibility requirements; or there is new, material information that adversely impacts the petitioner’s, applicant’s, or beneficiary’s eligibility. Proposed 8 CFR 214.1(c)(5) would apply to all nonimmigrants using Form I–129, Petition for a Nonimmigrant Worker, and would include a request on Form I–129 involving the same parties and same material facts. Currently, the USCIS Policy Manual frames its deference policy as applying to requests for an ‘‘extension of petition validity.’’ 51 The phrase ‘‘extension of petition validity’’ may be misread as limiting USCIS’s deference policy to petition extensions and excluding other types of requests that could involve the same parties and same material facts. Thus, DHS proposes to more broadly frame proposed 8 CFR 214.1(c)(5) as applying to ‘‘a request filed on Form I– 129’’ and would not use the term ‘‘extension of petition validity’’ as found in the current USCIS Policy Manual. 5. Evidence of Maintenance of Status DHS seeks to clarify current requirements and codify current practices concerning evidence of maintenance of status at proposed 8 49 See USCIS, ‘‘Deference to Prior Determinations of Eligibility in Requests for Extensions of Petition Validity, Policy Alert,’’ PA–2021–05 (April 27, 2021), https://www.uscis.gov/sites/default/files/ document/policy-manual-updates/20210427Deference.pdf (last visited on Mar. 23, 2023). 50 See USCIS Policy Manual, Volume 2, ‘‘Nonimmigrants,’’ Part A, ‘‘Nonimmigrant Policies and Procedures’’, Chapter 4, ‘‘Extension of Stay, Change of Status, and Extension of Petition Validity,’’ Section B, ‘‘Extension of Petition Validity,’’ https://www.uscis.gov/policy-manual/ volume-2-part-a-chapter-4. 51 See id. PO 00000 Frm 00012 Fmt 4701 Sfmt 4702 CFR 214.1(c)(1) through (7). Maintenance of status in this context generally refers to the applicant or beneficiary abiding by the terms and conditions of admission or extension of stay, as applicable (for example, if admitted as an H–1B nonimmigrant, the individual worked according to the terms and conditions of the H–1B petition approval on which their status was granted and did not engage in activities that would constitute a violation of status, such as by working without authorization). Primarily, DHS seeks to clarify that evidence of maintenance of status is required for petitions where there is a request to extend or amend the beneficiary’s stay. These changes would impact the population of nonimmigrants named in 8 CFR 214.1(c)(1): E–1, E–2, E–3, H–1B, H–1B1, H–2A, H–2B, H–3, L–1, O–1, O– 2, P–1, P–2, P–3, Q–1, R–1, and TN nonimmigrants. First, DHS would add a new provision at proposed 8 CFR 214.1(c)(6), which would provide, in part, that an applicant or petitioner seeking an extension of stay must submit supporting evidence to establish that the applicant or beneficiary maintained the previously accorded nonimmigrant status before the extension request was filed.52 Proposed 8 CFR 214.1(c)(6) would further provide that evidence of such maintenance of status may include, but is not limited to: copies of paystubs, W–2 forms, quarterly wage reports, tax returns, contracts, and work orders. This is consistent with the nonimmigrant petition form instructions, which state that for all classifications, if a beneficiary is seeking a change of status (COS) or extension of stay, evidence of maintenance of status must be included with the new petition.53 The form instructions further state that if the beneficiary is employed in the United States, the petitioner may submit copies of the beneficiary’s last two pay stubs, Form W–2, and other relevant evidence, as well as a copy of the beneficiary’s Form I–94, passport, travel document, or Form I–797.54 By proposing to codify these instructions, DHS hopes to clarify that petitioners should demonstrate such eligibility by submitting supporting documentation upfront with the extension of stay request, rather than waiting for USCIS to issue a request for additional 52 This is subject to the exception in 8 CFR 214.1(c)(4). 53 See USCIS, Form I–129 Instructions, ‘‘Instructions for Petition for Nonimmigrant Worker,’’ at 6, https://www.uscis.gov/sites/default/ files/document/forms/i-129instr.pdf (last visited Aug. 23, 2023). 54 See id. E:\FR\FM\23OCP3.SGM 23OCP3 lotter on DSK11XQN23PROD with PROPOSALS3 Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules information such as a request for evidence (RFE) or notice of intent to deny (NOID). Under proposed 8 CFR 214.1(c)(6) DHS further proposes to include additional examples of evidence to demonstrate maintenance of status, which include, but are not limited to: quarterly wage reports, tax returns, contracts, and work orders. By clearly stating what types of supporting documentation will help USCIS in adjudicating extension petitions, DHS hopes to further reduce the need for RFEs and NOIDs, which can be burdensome to both USCIS and petitioners. Requiring petitioners (or applicants, in the case of E nonimmigrants) to submit supporting evidence to establish that the beneficiary (or applicant) maintained the previously accorded nonimmigrant status before the extension of stay request was filed would not conflict with USCIS’s current and proposed deference policy. Although USCIS defers to prior USCIS determinations of eligibility in extension requests, USCIS would not be able to defer to a prior determination of maintenance of status during the preceding stay because it would not have made such a determination until adjudicating the extension of stay request. Even if there was a prior determination, USCIS need not give deference when there was a material error involved with a prior approval; a material change in circumstances or eligibility requirements; or new, material information that adversely impacts the petitioner’s, applicant’s, or beneficiary’s eligibility. Without supporting evidence to demonstrate maintenance of status, it is unclear how USCIS would determine if there was a material error, material change, or other new material information. For example, evidence pertaining to the beneficiary’s continued employment (e.g., paystubs) may help USCIS to determine whether the beneficiary was being employed consistent with the prior petition approval or whether there might have been material changes in the beneficiary’s employment (e.g., a material change in the place of employment). Thus, proposed 8 CFR 214.1(c)(6) would make clear that it is the filers’ burden to demonstrate that status was maintained before the extension of stay request was filed. This would be consistent with current 8 CFR 214.1(c)(4), which states that, ‘‘An extension of stay may not be approved for an applicant who failed to maintain the previously accorded status . . ., ’’ as well as proposed 8 CFR 214.1(c)(4)(i), which would state that, ‘‘An extension VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 or amendment of stay may not be approved for an applicant or beneficiary who failed to maintain the previously accorded status . . .’’ In line with proposed 8 CFR 214.1(c)(6), DHS is proposing to amend 8 CFR 214.2(h)(14) by removing the sentence ‘‘Supporting evidence is not required unless requested by the director.’’ This sentence causes confusion because it implies that supporting evidence is not required, contrary to current 8 CFR 214.1(c)(1) (a request for an extension of stay must be filed ‘‘on the form designated by USCIS, . . . with the initial evidence specified in § 214.2, and in accordance with the form instructions’’) and the form instructions (‘‘[f]or all classifications, if a beneficiary is seeking a [COS] or extension of stay, evidence of maintenance of status must be included with the new petition’’).55 Removing this sentence from proposed 8 CFR 214.2(h)(14) should further reduce the need for RFEs or NOIDs. For the same reasons, DHS is also proposing to remove the same or similar sentence found in the regulations for the L, O, and P nonimmigrant classifications. Specifically, DHS proposes to amend 8 CFR 214.2(l)(14)(i) by removing the sentence ‘‘Except in those petitions involving new offices, supporting documentation is not required, unless requested by the director.’’ DHS proposes to amend 8 CFR 214.2(o)(11) and (p)(13) by removing the sentence ‘‘Supporting documents are not required unless requested by the Director.’’ DHS is proposing technical changes to add the word ‘‘generally’’ to 8 CFR 214.2(l)(14)(i), (o)(11), and (p)(13), to account for untimely filed extensions that are excused consistent with 8 CFR 214.1(c)(4). As stated above, removing this sentence should reduce the need for RFEs or NOIDs. Further, it would not add an additional burden on the petitioner or applicant. In addition, DHS proposes to codify its longstanding practice of requiring evidence of maintenance of status for petitions requesting to amend a beneficiary’s stay in the United States. The proposed rule would add language to clarify that the petitioner must submit initial evidence that the beneficiary maintained the previously accorded status before the amendment of stay petition was filed. Failure to establish maintenance of status would result in a denial of the request to amend the 55 See USCIS, Form I–129 Instructions, ‘‘Instructions for Petition for Nonimmigrant Worker,’’ at 6, https://www.uscis.gov/sites/default/ files/document/forms/i-129instr.pdf (last visited Aug. 23, 2023). PO 00000 Frm 00013 Fmt 4701 Sfmt 4702 72881 beneficiary’s stay in the United States, unless USCIS determines that the failure to timely file the amendment of stay was due to extraordinary circumstances. See proposed 8 CFR 214.1(c)(1), (4), (6), and (7). DHS would also update the Form I– 129, Petition for a Nonimmigrant Worker, as well as the form filing instructions to coincide with and support these changes, as well as provide clarity about when an amended petition is appropriate, including the requirement of establishing maintenance of status for amendment of stay requests. Current 8 CFR 214.1(c)(1) generally requires evidence of maintenance of status with an extension of stay request, and 8 CFR 214.1(c)(4) generally states that an extension of stay may not be approved where a beneficiary failed to maintain the previously accorded status. DHS proposes to add specific references to requests to ‘‘amend the terms and conditions of the nonimmigrant’s stay without a request for additional time’’ or for an ‘‘amendment of stay’’ to proposed 8 CFR 214.1(c)(1), (4), (6), and (7), so that these regulations clearly convey that evidence of maintenance of status is also required for petitions requesting to amend a beneficiary’s stay in the United States, even when the petition is not requesting additional time beyond the period previously granted. For example, a petitioner may request to amend the stay of the beneficiary when filing an amended petition but not seek additional time for the beneficiary’s stay because the beneficiary may have an unexpired I–94 that has been granted until the end of the 6-year period of admission and is not yet eligible for an exemption from the 6-year period of admission limitation. In that example, the petitioner may seek authorization for the beneficiary to remain in the United States, but under different terms and conditions than previously granted, without requesting additional time. A petitioner filing an amended petition with a request to amend the terms and conditions of the beneficiary’s stay, but without a request for additional time, would not specifically request an ‘‘extension of stay’’ on the Form I–129 petition. Nevertheless, DHS considers a petition requesting to amend the terms and conditions of the beneficiary’s stay to be substantively equivalent to an extension of stay request for purposes of establishing maintenance of status and will exercise discretion when granting such requests. In other words, DHS considers an amendment of stay request as a request to continue to allow the beneficiary to remain in the United States based upon the amended E:\FR\FM\23OCP3.SGM 23OCP3 lotter on DSK11XQN23PROD with PROPOSALS3 72882 Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules conditions for a period of stay that has already been granted. Therefore, DHS believes that it is reasonable to require evidence that maintenance of status has been satisfied, before USCIS may favorably exercise its discretion to grant an amendment of stay request. Further, including amendments of stay under 8 CFR 214.1(c) would close a potential loophole of using an amended petition for a beneficiary who has not maintained status, yet wishes to remain in the United States, without having to depart and be readmitted in that status. Currently, most petitioners filing to amend a beneficiary’s stay already submit evidence of maintenance of status; however, if an amended petition does not contain evidence of maintenance of status, USCIS typically issues a request for such evidence. By proposing to codify current practice in 8 CFR 214.1(c), DHS hopes to clarify that petitioners should demonstrate eligibility by submitting evidence of maintenance of status with the amendment of stay request (just like with an extension of stay request), rather than waiting for USCIS to request this information. By clearly stating what types of supporting documentation will help USCIS in adjudicating requests to amend a beneficiary’s stay, DHS hopes to further reduce the need for RFEs and NOIDs, which can be burdensome for petitioners and USCIS, and generally extends the time needed to complete the adjudication of the petition. Specifically, DHS proposes to revise 8 CFR 214.1(c)(4), to add a reference to an ‘‘amendment’’ of stay. Aside from clarifying that evidence of maintenance of status would be required in an amendment of stay request, this change would also clarify that USCIS can excuse the late filing of an amendment of stay request under the circumstances described at proposed 8 CFR 214.1(c)(4)(i)(A) through (D). ‘‘Late filing’’ in this context would include certain extension of stay requests filed after the expiration date on the Form I– 94. A ‘‘late filing’’ would also encompass, for example, a request for an amendment of stay that was filed after the beneficiary temporarily stopped working due to extraordinary circumstances beyond their control. DHS would clarify in proposed 8 CFR 214.1(c)(4)(ii) that, if USCIS excuses the late filing of an amendment of stay request, it would do so without requiring the filing of a separate application or petition and would grant the amendment of stay, if otherwise VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 eligible, from the date the petition was filed.56 DHS proposes nonsubstantive edits to improve readability to 8 CFR 214.1(c)(4). DHS also proposes nonsubstantive edits in proposed 8 CFR 214.1(c)(1) and (4) to add references to a ‘‘beneficiary,’’ ‘‘petition,’’ or ‘‘Form I– 129,’’ to account for the extension or amendment of stay being requested on the Form I–129 petition, and to replace ‘‘alien’’ with ‘‘beneficiary’’ and ‘‘Service’’ with ‘‘USCIS.’’ With respect to proposed 8 CFR 214.1(c)(7), this provision would contain the same language as current 8 CFR 214.1(c)(5), except that DHS would add references to an ‘‘amendment’’ of stay and make other nonsubstantive edits similar to the ones described above. 6. Eliminating the Itinerary Requirement for H Programs DHS is proposing to eliminate the H programs’ itinerary requirement. See proposed 8 CFR 214.2(h)(2)(i)(B) and (F). Current 8 CFR 214.2(h)(2)(i)(B) states that ‘‘A petition that requires services to be performed or training to be received in more than one location must include an itinerary with the dates and locations of the services or training and must be filed with USCIS as provided in the form instructions.’’ In addition, current 8 CFR 214.2(h)(2)(i)(F), for agents as petitioners, contains itinerary requirement language. The information provided in an itinerary is largely duplicative of information already provided in the LCA for H–1B petitions and the temporary labor certification (TLC) for H–2 petitions. The LCA and TLC require the petitioner to the list the name and address where work will be performed, as well as the name and address of any secondary entity where work will be performed. It is also largely duplicative of information already provided on the Form I–129, which requires the petitioner to provide the address where the beneficiary will work if different from the petitioner’s address listed on the form.57 Therefore, eliminating the itinerary requirement would reduce duplication that increases petitioner burden and promote more efficient adjudications, without compromising 56 Proposed 8 CFR 214.1(c)(4)(ii) would continue to state, with minor revisions, that if USCIS excuses the late filing of an extension of stay request, it will do so without requiring the filing of a separate application or petition and will grant the extension of stay from the date the previously authorized stay expired or the amendment of stay from the date the petition was filed. 57 See USCIS, Form I–129, ‘‘Petition for a Nonimmigrant Worker,’’ https://www.uscis.gov/ sites/default/files/document/forms/i-129.pdf (last visited Mar. 14, 2023). PO 00000 Frm 00014 Fmt 4701 Sfmt 4702 program integrity. Furthermore, USCIS no longer applies the itinerary requirement to H–1B petitions governed by 8 CFR 214.2(h)(2)(i)(B), as memorialized in USCIS Policy Memorandum PM–602–0114, ‘‘Rescission of Policy Memoranda’’ (June 17, 2020) (rescinding USCIS Policy Memorandum PM–602–0157, ‘‘Contracts and Itineraries Requirements for H–1B Petitions Involving ThirdParty Worksites’’ (Feb. 22, 2018)).58 To eliminate the unnecessary duplication of work, DHS also proposes to eliminate the itinerary requirement for agents acting as petitioners at current 8 CFR 214.2(h)(2)(i)(F). In proposing to eliminate the itinerary requirement for agents at paragraph (h)(2)(i)(F), DHS also proposes to incorporate technical changes to this provision by moving language currently found in paragraph (h)(2)(i)(F)(2) to paragraph (h)(2)(i)(F)(1); removing paragraph (h)(2)(i)(F)(2); and redesignating current paragraph (h)(2)(i)(F)(3) as proposed paragraph (h)(2)(i)(F)(2). Proposed 8 CFR 214.2(h)(2)(i)(F)(1) would incorporate the following language currently found in paragraph (h)(2)(i)(F)(2): ‘‘The burden is on the agent to explain the terms and conditions of the employment and to provide any required documentation. In questionable cases, a contract between the employers and the beneficiary or beneficiaries may be required.’’ This proposed restructuring at 8 CFR 214.2(h)(2)(i)(F) is intended to simplify and consolidate the guidance for agents as petitioners following the removal of the itinerary requirement language. 7. Validity Expires Before Adjudication DHS proposes to allow H–1B petitions to be approved or have their requested validity period dates extended if USCIS adjudicates and deems the petition approvable after the initially requested validity period end-date, or the period for which eligibility has been established, has passed. This typically would happen if USCIS deemed the petition approvable upon a favorable motion to reopen, motion to reconsider, or appeal. Specifically, under proposed 8 CFR 214.2(h)(9)(ii)(D)(1), if USCIS adjudicates an H–1B petition and deems it otherwise approvable after the initially requested validity period end58 USCIS issued policy memorandum PM–602– 0114 following the decision of the U.S. District Court for the District of Columbia in ITServe Alliance, Inc. v. Cissna, 443 F. Supp. 3d 14, 42 (D.D.C. 2020) (‘‘the itinerary requirement in the INS 1991 Regulation [codified at 8 CFR 214.2(h)(2)(i)(B)] . . has been superseded by statute and may not be applied to H–1B visa applicants’’). See also Serenity Info Tech, Inc. v. Cuccinelli, 461 F. Supp. 3d 1271, 1285 (N.D. Ga. 2020) (citing ITServe). E:\FR\FM\23OCP3.SGM 23OCP3 lotter on DSK11XQN23PROD with PROPOSALS3 Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules date, or the last day for which eligibility has been established, USCIS may issue an RFE asking whether the petitioner wants to update the dates of intended employment. If in response to the RFE the petitioner confirms that it wants to update the dates of intended employment and submits a different LCA that corresponds to the new requested validity dates, even if that LCA was certified after the date the H– 1B petition was filed, and assuming all other eligibility criteria are met, USCIS would approve the H–1B petition for the new requested period or the period for which eligibility has been established, as appropriate, rather than require the petitioner to file a new or amended petition. The petitioner’s request for new dates of employment and submission of an LCA with a new validity period that properly corresponds to the revised requested validity period on the petition and an updated prevailing or proffered wage, if applicable, would not be considered a material change, except that the petitioner may not reduce the proffered wage from that originally indicated in their petition. See proposed 8 CFR 214.2(h)(9)(ii)(D)(1). However, the total petition validity period would still not be able to exceed 3 years. Currently, if USCIS adjudicates and deems these types of petitions approvable after the initially requested validity period, or the last day for which eligibility has been established, has elapsed, the petition must be denied. The petitioner is also not able to change the requested validity period using the same petition. Instead, the petitioner must file an amended or new petition requesting a new validity period if they seek to employ or continue to employ the beneficiary. See 8 CFR 214.2(h)(2)(i)(E) and (h)(11)(i)(A). The requirement to file an amended or new petition in this circumstance results in additional filing costs and burden for the petitioner. It also results in unnecessary expenditures of USCIS resources to intake and adjudicate another petition, even though the only change generally is a new requested validity period due to the passage of time. This is not an efficient use of USCIS or the petitioner’s resources. In certain circumstances this requirement may also result in the H–1B beneficiary losing their cap number, which generally would be an unequitable result for a petition that was otherwise approvable. Aside from changing the requested validity period, the petitioner would also be able to increase the proffered wage to conform with a new prevailing VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 wage if the prevailing wage has increased due to the passage of time. The petitioner would also be able to increase the proffered wage for other reasons, such as to account for other market wage adjustments. An increase to the proffered wage would not be considered a material change, so long as there are no other material changes to the position. However, a petitioner would not be allowed to reduce the proffered wage, even if the prevailing wage decreased due to the passage of time. If the petitioner intends to reduce the proffered wage or make any other material change to the proposed employment, it would have to file an amended or new petition in accordance with existing provisions at 8 CFR 214.2(h)(2)(i)(E) and (h)(11)(i)(A). Under proposed 8 CFR 214.2(h)(9)(ii)(D), USCIS would not be required to issue an RFE, as it could instead proceed to approve the petition for the originally requested period or until the last day for which eligibility has been established, as appropriate. For example, USCIS would not be required to issue an RFE when the beneficiary has already been granted H–1B status through another employer, changed nonimmigrant status, adjusted status, or has reached their 6-year limitation on stay, such that an RFE asking the petitioner if they want to update the requested dates of H–1B employment would serve little or no purpose. Consistent with these examples, DHS would consider potential factors that could inform whether USCIS issues an RFE as including, but not limited to, additional petitions filed or approved on the beneficiary’s behalf, or the beneficiary’s eligibility for additional time in H–1B status. See proposed 8 CFR 214.2(h)(9)(ii)(D)(1) and (2). Proposed 8 CFR 214.2(h)(9)(ii)(D)(2) provides that if no RFE is issued concerning the requested dates of employment, or if the petitioner does not respond, or the response to the RFE does not support new dates of employment, the petition would be approved, if otherwise approvable, for the originally requested period or until the last day for which eligibility has been established, as appropriate. The last day for which eligibility has been established could, for example, be the date the beneficiary reached their sixyear maximum limitation on stay, or the end date of the supporting LCA, or one year from approval in case of temporary licensure. If the petition is approved for the originally requested period or the last day for which eligibility has been established, the petition would not be forwarded to the U.S. Department of State (DOS) nor would any PO 00000 Frm 00015 Fmt 4701 Sfmt 4702 72883 accompanying request for a COS, extension of stay, or amendment of stay, be granted because the validity period would have already expired and would therefore not support issuance of a visa or a grant of status. B. Benefits and Flexibilities 1. H–1B Cap Exemptions DHS proposes to revise the requirements to qualify for H–1B cap exemption under 8 CFR 214.2(h)(8)(iii)(F)(4) when a beneficiary is not directly employed by a qualifying institution, organization, or entity. DHS also proposes to revise the definition of ‘‘nonprofit research organization’’ and ‘‘governmental research organization’’ under 8 CFR 214.2(h)(19)(iii)(C). These proposed changes are intended to clarify, simplify, and modernize eligibility for cap-exempt H–1B employment, so that they are less restrictive and better reflect modern employment relationships. The proposed changes are also intended to provide additional flexibility to petitioners to better implement Congress’s intent to exempt from the annual H–1B cap certain H–1B beneficiaries who are employed at a qualifying institution, organization, or entity. Congress set the current annual regular cap for the H–1B visa category at 65,000. See INA section 214(g)(1)(A), 8 U.S.C. 1184(g)(1)(A). Not all H–1B nonimmigrant visas (or grants of H–1B status) are subject to this annual cap. INA section 214(g)(5) allows certain employers to employ H–1B nonimmigrant workers without being subject to the annual numerical cap. See INA section 214(g)(5), 8 U.S.C. 1184(g)(5). For example, INA section 214(g)(5)(A) and (B) exempts those workers who are employed at an institution of higher education or a related or affiliated nonprofit entity, a nonprofit research organization or a governmental research organization. See INA section 214(g)(5)(A)–(B), 8 U.S.C. 1184(g)(5)(A)–(B). Currently, DHS regulations state that an H–1B nonimmigrant worker is exempt from the cap if employed by: (1) an institution of higher education; (2) a nonprofit entity related to or affiliated with such an institution; (3) a nonprofit research organization; or (4) a governmental research organization. See 8 CFR 214.2(h)(8)(iii)(F)(1) through (3). DHS regulations also state that an H–1B nonimmigrant worker may be exempt from the cap when they are not ‘‘directly employed’’ by a qualifying institution, organization, or entity, if they are employed at a qualifying E:\FR\FM\23OCP3.SGM 23OCP3 72884 Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules institution, organization, or entity so long as: (1) the majority of the worker’s work time will be spent performing job duties at a qualifying institution, organization, or entity; and (2) the worker’s job duties will directly and predominately further the essential purpose, mission, objectives or functions of the qualifying institution, organization or entity. See 8 CFR 214.2(h)(8)(iii)(F)(4). When relying on this exemption, the H–1B petitioner must also establish that there is a nexus between the work to be performed and the essential purpose, mission, objectives, or functions of the qualifying institution, organization, or entity. Id. The H–1B cap exemption regulations define ‘‘nonprofit entity,’’ ‘‘nonprofit research organization,’’ and ‘‘governmental research organization’’ at 8 CFR 214.2(h)(8)(iii)(F)(3). For the definition of ‘‘nonprofit entity,’’ the regulation adopts the definition at 8 CFR 214.2(h)(19)(iv).59 For the definition of ‘‘nonprofit research organization’’ and ‘‘governmental research organization,’’ the regulation adopts the definition at 8 CFR 214.2(h)(19)(iii)(C). The regulation at 8 CFR 214.2(h)(19)(iii)(C) states that a nonprofit research organization is ‘‘primarily engaged in basic research and/or applied research,’’ while a governmental research organization is a Federal, State, or local entity ‘‘whose primary mission is the performance or promotion of basic research and/or applied research.’’ Id. Specifically, DHS proposes to change the phrase ‘‘the majority of’’ at 8 CFR 214.2(h)(8)(iii)(F)(4) to ‘‘at least half’’ to clarify that H–1B beneficiaries who are not directly employed by a qualifying institution, organization, or entity identified in section 214(g)(5)(A) or (B) of the Act, who equally split their work time between a cap-exempt entity and a non-cap-exempt entity, may be eligible for cap exemption. See proposed 8 CFR 214.2(h)(8)(iii)(F)(4). The purpose and intended effect of the proposed change is to update the standard to qualify for this cap exemption, as USCIS has historically interpreted ‘‘the majority of’’ as meaning more than half.60 For lotter on DSK11XQN23PROD with PROPOSALS3 59 8 CFR 214.2(h)(19)(iii) and (iv) pertains to organizations that are exempt from the ACWIA fee for H–1B petitions. 60 See USCIS, Adjudicator’s Field Manual (AFM), Chapter 31.3(g)(13), ‘‘Cap Exemptions Pursuant to 214(g)(5) of the Act,’’ https://www.uscis.gov/sites/ default/files/document/policy-manual-afm/afm31external.pdf, at 36 (providing an example of a qualifying H–1B cap-exempt petition where the beneficiary ‘‘will spend more than half of her time’’ working at the qualifying entity). While USCIS retired the AFM in May 2020, this example nevertheless illustrates the agency’s historical interpretation since at least June 2006, when VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 example, under proposed 8 CFR 214.2(h)(8)(iii)(F)(4), a beneficiary who works at a for-profit hospital and research center that would not otherwise be a qualifying institution would qualify for this cap exemption if the beneficiary will spend exactly 50 percent of their time performing job duties at a qualifying research organization (and those job duties would further an activity that supports or advances one of the fundamental purposes, missions, objectives, or functions of the qualifying research organization). Under the current regulations, the same beneficiary would not qualify because 50 percent would not meet the ‘‘majority of’’ standard. The application of 8 CFR 214.2(h)(8)(iii)(F)(4) to a beneficiary who is not directly employed by a qualifying institution, organization, or entity identified in section 214(g)(5)(A) or (B) of the Act would remain unchanged. DHS also proposes to revise 8 CFR 214.2(h)(8)(iii)(F)(4) to remove the requirement that a beneficiary’s duties ‘‘directly and predominately further the essential purpose, mission, objectives or functions’’ of the qualifying institution, organization, or entity and replace it with the requirement that the beneficiary’s duties ‘‘directly further an activity that supports or advances one of the fundamental purposes, missions, objectives, or functions’’ of the qualifying institution, organization, or entity. See proposed 8 CFR 214.2(h)(8)(iii)(F)(4).61 This proposed change is intended to update the availability of cap exemptions to include beneficiaries whose work directly contributes to, but does not necessarily predominantly further, the qualifying organization’s fundamental purpose, mission, objectives, or functions. Further, this proposed change, by revising ‘‘the’’ to ‘‘an’’, acknowledges that a qualifying organization may have more than one fundamental purpose, mission, objective, or function, and this fact should not preclude an H–1B chapter 31.3(g)(13) was added. See also USCIS, Interoffice Memorandum HQPRD 70/23.12, ‘‘Guidance Regarding Eligibility for Exemption from the H–1B Cap Based on § 103 of the American Competitiveness in the Twenty-First Century Act of 2000 (AC21) (Pub. L. 106–313)’’ (Jun. 6, 2006), https://www.uscis.gov/sites/default/files/document/ memos/ac21c060606.pdf. 61 Although DHS would replace the word ‘‘essential’’ with ‘‘fundamental’’ in proposed 8 CFR 214.2(h)(8)(iii)(F)(4), these two words are synonymous for purposes of cap exemptions. DHS proposes to use ‘‘fundamental’’ in proposed 8 CFR 214.2(h)(8)(iii)(F)(4) in order to be consistent with current and proposed 8 CFR 214.2(h)(19)(iii). PO 00000 Frm 00016 Fmt 4701 Sfmt 4702 beneficiary from being exempt from the H–1B cap. Proposed 8 CFR 214.2(h)(8)(iii)(F)(4) would also eliminate the sentence stating that the H–1B petitioner has the burden to establish that there is a nexus between the beneficiary’s duties and the essential purpose, mission, objectives or functions of the qualifying institution, organization, or entity. Since the petitioner is already required to establish that the beneficiary’s duties further an activity that supports one of the fundamental purposes, missions, objectives, or functions of the qualifying entity, it is inherently required to show a nexus between the duties and the entity’s purpose, mission, objections, or functions, and therefore, the ‘‘nexus’’ requirement is redundant. These proposed changes to 8 CFR 214.2(h)(8)(iii)(F)(4) would provide more clarity and flexibility for H–1B beneficiaries who will not be directly employed by a qualifying institution, organization, or entity. DHS also proposes to clarify that the requirement that the beneficiary spend at least half of their work time performing job duties ‘‘at’’ a qualifying institution should not be taken to mean the duties need to be physically performed onsite at the qualifying institution. DHS is aware that many positions can be performed remotely. When considering whether such a position is cap-exempt, the proper focus is on the job duties, rather than where the duties are performed physically. DHS also proposes to revise 8 CFR 214.2(h)(19)(iii)(C), which states that a nonprofit research organization is an entity that is ‘‘primarily engaged in basic research and/or applied research,’’ and a governmental research organization is a Federal, State, or local entity ‘‘whose primary mission is the performance or promotion of basic research and/or applied research.’’ DHS proposes to replace ‘‘primarily engaged’’ and ‘‘primary mission’’ with ‘‘a fundamental activity of’’ to permit a nonprofit entity or governmental research organization that conducts research as a fundamental activity, but is not primarily engaged in research, or where research is not the primary mission, to meet the definition of a nonprofit research entity or governmental research organization. See proposed 8 CFR 214.2(h)(19)(iii)(C). Reorienting the cap exemptions for nonprofit research organizations and governmental research organizations to the ‘‘fundamental activity’’ construct would align these standards with the current ‘‘fundamental activity’’ standard found for formal written affiliation agreements under 8 CFR E:\FR\FM\23OCP3.SGM 23OCP3 Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules lotter on DSK11XQN23PROD with PROPOSALS3 214.2(h)(8)(iii)(F)(2)(iv) and (h)(19)(iii)(B)(4), and would bring more clarity and predictability to decisionmaking, for both adjudicators and the regulated community. DHS acknowledges that the ‘‘primarily’’ and ‘‘primary’’ requirements at current 8 CFR 214.2(h)(19)(iii)(C) have been in effect for over a decade for purposes of cap exemptions, and that DHS declined to make the same changes it is currently proposing in response to commenters’ suggestions when codifying this regulation in 2016.62 At that time, DHS stated ‘‘that maintaining these longstanding interpretations, which include the ‘primarily’ and ‘primary’ requirements, will serve to protect the integrity of the cap and fee exemptions as well as clarify for stakeholders and adjudicators what must be proven to successfully receive such exemptions.’’ 63 However, rather than providing clarity, the ‘‘primarily’’ and ‘‘primary’’ requirements have resulted in inconsistency and confusion surrounding eligibility for such cap exemptions.64 In 2015, DHS proposed using the phrase ‘‘primary purpose’’ at 8 CFR 214.2(h)(8)(iii)(F)(2)(iv) and (h)(19)(iii)(B)(4) (addressing cap exemption and ACWIA fee exemption, respectively, for a nonprofit entity that is related to or affiliated with an institution of higher education based on a formal written affiliation agreement).65 In the 2016 final rule, however, DHS explained that it was not pursuing the proposed phrase ‘‘primary purpose’’ and instead chose to replace it with ‘‘fundamental activity’’ at 8 CFR 214.2(h)(8)(iii)(F)(2)(iv) and (h)(19)(iii)(B)(4) ‘‘to avoid potential confusion’’ and to make it ‘‘clearer that nonprofit entities may qualify for the cap and fee exemptions even if they are engaged in more than one fundamental activity, any one of which may directly 62 As DHS explained in the final rule, the ‘‘primarily’’ and ‘‘primary’’ requirements ‘‘have been in place since 1998 with regard to fee exemptions and have been in effect for more than a decade for purposes of the cap exemptions.’’ See ‘‘Retention of EB–1, EB–2, and EB–3 Immigrant Workers and Program Improvements Affecting High-Skilled Nonimmigrant Workers,’’ 81 FR 82398, 82446 (Nov. 18, 2016). 63 Id. 64 See, e.g., Open Society Inst. v. USCIS, 2021 WL 4243403, at *1 (D.D.C. 2021) (‘‘Open Society maintains that on over a dozen prior occasions USCIS found that Open Society satisfied this standard but that in 2020 the agency reversed course without sufficient explanation or sound reason.’’). 65 See ‘‘Retention of EB–1, EB–2, and EB–3 Immigrant Workers and Program Improvements Affecting High-Skilled Nonimmigrant Workers,’’ 80 FR 81900 (Dec. 31, 2015) (proposed rule). VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 contribute to the research or education mission of a qualifying college or university.’’ 66 Even though DHS declined to concurrently change the ‘‘primarily’’ and ‘‘primary’’ language at current 8 CFR 214.2(h)(19)(iii)(C), DHS acknowledges that the ‘‘fundamental activity’’ text in current 8 CFR 214.2(h)(8)(iii)(F)(2)(iv) and (h)(19)(iii)(B)(4) did enhance clarity in the intended manner and believes that current 8 CFR 214.2(h)(19)(iii)(C) would similarly benefit from this proposed change. In addition, DHS believes that the proposed ‘‘fundamental activity’’ standard would still protect the integrity of the cap. While changing this terminology may somewhat expand who is eligible for the cap exemption, it would still require that an employer demonstrate that research is a ‘‘fundamental activity,’’ which is a meaningful limiting standard. Not every activity an organization engages in would be considered a ‘‘fundamental activity.’’ A fundamental activity would still have to be an important and substantial activity, although it need not be the organization’s principal or foremost activity as required under the current ‘‘primary’’ construct.67 Further, the organization would still need to meet all the other requirements to qualify as a nonprofit research organization or governmental research organization, including engaging in qualifying research as defined in proposed 8 CFR 214.2(h)(19)(iii)(C), and documenting its tax exempt status pursuant to proposed 8 CFR 214.2(h)(19)(iv). DHS believes that the ‘‘primarily’’ and ‘‘primary’’ requirements at current 8 CFR 214.2(h)(19)(iii)(C) are too restrictive.68 As explained above, the current ‘‘primarily’’ and ‘‘primary’’ construct requires a petitioner to demonstrate that research is its principal activity, i.e., that research is the main or primary activity.69 One key 66 See ‘‘Retention of EB–1, EB–2, and EB–3 Immigrant Workers and Program Improvements Affecting High-Skilled Nonimmigrant Workers,’’ 81 FR 82398, 82444 (Nov. 18, 2016). 67 See Open Society Inst. v. USCIS, 2021 WL 4243403, at *5 (D.D.C. 2021) (‘‘the ordinary meaning of ‘primarily’ as it is used in 8 CFR 214.2(h)(19)(iii)(C) is ‘principally and as distinguished from incidentally or secondarily.’’’). 68 Multiple comments leading to the 2016 final rule also expressed concern that the ‘‘primary purpose’’ requirement was too restrictive, although in the context of 8 CFR 214.2(h)(8)(ii)(F)(2)(iv) and (h)(19)(iii)(B)(4). 81 FR at 82403. 69 See Open Society Institute v. USCIS, 2021 WL 4243403, at *4–5 (D.D.C. 2021) (The court examined AAO’s analysis of the term ‘‘primarily engaged’’ and the AAO’s conclusion that ‘‘a nonprofit organization is ‘‘primarily engaged’’ in research if, and only if, it is ‘‘‘directly and principally’ engaged PO 00000 Frm 00017 Fmt 4701 Sfmt 4702 72885 difference between the current and proposed standard is that an employer could have more than one ‘‘fundamental activity,’’ whereas the ‘‘primary’’ or ‘‘primarily’’ standard requires that research is the employer’s foremost and main activity. This proposed change acknowledges the reality that nonprofit organizations may engage in several important activities. The proposed change modernizes the definition of ‘‘nonprofit research organization’’ and ‘‘governmental research organization’’ to include entities that may assist with aspects of research throughout the research cycle despite not being primarily engaged in performing the research. For example, a nonprofit organization with a mission to eradicate malaria that engages in lobbying, public awareness, funding medical research, and performing its own research on the efficacy of various preventative measures, may qualify for H–1B cap exemption even if it was not primarily engaged in research. In this example, the organization would still qualify for the cap exemption if research were one of several ‘‘fundamental activities’’ of the organization, as opposed to its primary mission. Similarly, a governmental research organization that engages in semiconductor manufacturing research and development could qualify for H–1B cap exemption if research is a fundamental activity of the organization. Under the proposed rule, the organization may be eligible for cap exemptions if research is one of its fundamental activities as opposed to its primary activity. DHS also proposes to revise 8 CFR 214.2(h)(19)(iii)(C) to state that a ‘‘nonprofit research organization or governmental research organization may perform or promote more than one fundamental activity.’’ See proposed 8 CFR 214.2(h)(19)(iii)(C). This proposed change would align with DHS’s position that a nonprofit entity may engage in more than one fundamental activity under current 8 CFR in research’’: ‘‘. . . [While] [Open Society] is ‘focused on research—researching problems in the world, researching possible solutions for those problems, and researching how to implement those solutions,’ the regulation at 8 CFR 214.2(h)(19)(iii)(C) defines a nonprofit research organization as one that is ‘primarily engaged’ in research, which we interpret to mean directly and principally engaged in research. Based on the totality of evidence in the record, and considering its research activities in proportion to its other activities, we conclude that the record does not demonstrate that [Open Society] is directly and principally engaged in research. The research conducted by [Open Society] is incidental, or, at best, secondary to its principal activities: making grants to promote social, legal and economic reforms.’ ’’) (changes in original). E:\FR\FM\23OCP3.SGM 23OCP3 72886 Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules lotter on DSK11XQN23PROD with PROPOSALS3 214.2(h)(8)(iii)(F)(2)(iv),70 which DHS seeks to codify at proposed 8 CFR 214.2(h)(8)(iii)(F)(2)(iv) and (h)(19)(iii)(B)(4) as well. DHS believes it should apply the same standard that an entity may engage in more than one fundamental activity, regardless of whether that entity is requesting cap exemption as an ‘‘affiliated or related nonprofit entity’’ or a ‘‘nonprofit research organization or governmental research organization.’’ Finally, DHS proposes to add language that both basic and applied research may also include ‘‘designing, analyzing, and directing the research of others if on an ongoing basis and throughout the research cycle.’’ See proposed 8 CFR 214.2(h)(19)(iii)(C). Taken together, these proposed changes clarify, simplify, and modernize eligibility for cap-exempt H– 1B employment.71 DHS’s proposed changes to 8 CFR 214.2(h)(8)(iii)(F)(4) and (h)(19)(iii)(C) provide additional flexibility to exempt from the H–1B cap certain H–1B beneficiaries who are employed at a qualifying institution, organization, or entity. These changes are consistent with the language of the statute at INA section 214(g)(5)(A) through (B) and would further the INA’s goals of improving economic growth and job creation by facilitating U.S. employers’ access to high-skilled workers, particularly at these institutions, organizations, and entities.72 DHS further proposes to amend the definition of ‘‘nonprofit or tax exempt 70 Id. at 82445 (‘‘DHS emphasizes that a nonprofit entity may meet this definition even if it is engaged in more than one fundamental activity, so long as at least one of those fundamental activities is to directly contribute to the research or education mission of a qualifying college or university.’’). 71 These proposed changes would also impact eligibility for exemption from the ACWIA fees applicable to initial cap-subject petitions. The definitions of ‘‘nonprofit research organization’’ and ‘‘governmental research organization’’ at 8 CFR 214.2(h)(19)(iii)(C), and ‘‘nonprofit entity’’ at 8 CFR 214.2(h)(19)(iv), would continue to apply to which entities are exempt from the H–1B- cap as well as which entities are exempt from the additional ACWIA fee. 72 See S. Rep. No. 260, 106th Cong., 2nd Sess. (Apr. 11, 2000), at 10 (AC21 sought to help the American economy by, in part, exempting from the H–1B cap ‘‘visas obtained by universities, research facilities, and those obtained on behalf of graduate degree recipients to help keep top graduates and educators in the country.’’ See also ‘‘Retention of EB–1, EB–2, and EB–3 Immigrant Workers and Program Improvements Affecting High-Skilled Nonimmigrant Workers,’’ 81 FR 82398, 82447 (Nov. 18, 2016) (‘‘DHS believes that its policy extending the cap exemption to individuals employed ‘at’ and not simply employed ‘by’ a qualifying institution, organization or entity is consistent with the language of the statute and furthers the goals of AC21 to improve economic growth and job creation by immediately increasing U.S. access to highskilled workers, and particularly at these institutions, organizations, and entities.’’). VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 organizations’’ by eliminating 8 CFR 214.2(h)(19)(iv)(B), which currently requires that the petitioner provide evidence that it ‘‘[h]as been approved as a tax exempt organization for research or educational purposes by the Internal Revenue Service.’’ In its experience, USCIS has found that Internal Revenue Service (IRS) letters generally do not identify the reasons why an entity received approval as a tax exempt organization, so current 8 CFR 214.2(h)(19)(iv)(B) imposes an evidentiary requirement that is unduly difficult to meet. Proposed 8 CFR 214.2(h)(19)(iv) would more simply state that a nonprofit organization or entity ‘‘must be determined by the Internal Revenue Service as a tax exempt organization under the Internal Revenue Code of 1986, section 501(c)(3) (c)(4), or (c)(6), 26 U.S.C. 501(c)(3), (c)(4), or (c)(6).’’ While this change would remove the requirement that the IRS letter itself state that the petitioner’s approval as a tax exempt organization was ‘‘for research or educational purposes,’’ DHS is not proposing to eliminate or otherwise change the overarching requirement that a qualifying nonprofit or tax exempt petitioner be an institution of higher education or a related or affiliated nonprofit entity, or a nonprofit research organization or a governmental research organization institution, as required by the regulations and INA section 214(g)(5). The petitioner would still need to submit documentation to demonstrate that it meets such a requirement, except that the submitted documentation would not need to be in the form of an IRS letter. 2. Automatic Extension of Authorized Employment Under 8 CFR 214.2(f)(5)(vi) (Cap–Gap) DHS proposes to revise 8 CFR 214.2(f)(5)(vi) to provide an automatic extension of duration of status and postcompletion OPT or 24-month extension of post-completion OPT, as applicable, until April 1 of the relevant fiscal year for which the H–1B petition is requested. See proposed 8 CFR 214.2(f)(5)(vi). Currently, the automatic extension is valid only until October 1 of the fiscal year for which H–1B status is being requested. This change would result in more flexibility for both students and USCIS and would help to avoid disruption to U.S. employers that are lawfully employing F–1 students while a qualifying H–1B cap-subject petition is pending. As an added integrity measure, DHS proposes to specify that the H–1B petition must be ‘‘nonfrivolous’’ in order for the student to benefit from the cap-gap extension. PO 00000 Frm 00018 Fmt 4701 Sfmt 4702 See proposed 8 CFR 214.2(f)(5)(vi)(A)(3). Each year, a number of U.S. employers seek to employ F–1 students via the H–1B program by requesting a COS and filing an H–1B cap petition with USCIS. Because petitioners may not file H–1B petitions more than six months before the date of actual need for the employee,73 the earliest date an H–1B cap-subject petition may be filed for a given fiscal year is April 1, six months prior to the start of the applicable fiscal year for which initial H–1B classification is sought. Many F– 1 students complete a program of study or post-completion OPT in mid-spring or early summer. Per current regulations, after completing their program or post-completion OPT, F–1 students have 60 days to depart the United States or take other appropriate steps to maintain a lawful status. See 8 CFR 214.2(f)(5)(iv). However, because the change to H–1B status cannot occur earlier than October 1, an F–1 student whose program or post-completion OPT expires in mid-spring has two or more months following the 60-day period before the authorized period of H–1B status can begin. To address this situation, commonly known as the ‘‘capgap,’’ DHS established regulations that automatically extended F–1 Duration of Status (D/S) and, if applicable, postcompletion OPT employment authorization to October 1 for eligible F–1 students. See 8 CFR 214.2(f)(5)(vi). The extension of F–1 D/S and OPT employment authorization is commonly known as the ‘‘cap-gap extension.’’ DHS proposes to further extend F–1 status and post-completion OPT, including STEM OPT, in this context.74 Under current regulations, the automatic cap-gap extension is valid only until October 1 of the fiscal year for which H–1B status is being requested. See 8 CFR 214.2(f)(5)(vi). When the October 1 extension was initially promulgated through an interim final rule in 2008, DHS considered it an administrative solution to bridge the gap between the end of the academic year and the beginning of the fiscal year, when the student’s H–1B status typically would begin.75 When this 73 See 8 CFR 214.2(h)(2)(i)(I). previously proposed extending the capgap period, but the proposed rule was never finalized and was subsequently withdrawn. See ‘‘Establishing a Fixed Time Period of Admission and an Extension of Stay Procedure for Nonimmigrant Academic Students, Exchange Visitors, and Representatives of Foreign Information Media,’’ 85 FR 60526 (Sept. 25, 2020) (withdrawn by 86 FR 35410 (July 6, 2021)). 75 See ‘‘Extending Period of Optional Practical Training by 17 Months for F–1 Nonimmigrant Students With STEM Degrees and Expanding Cap74 DHS E:\FR\FM\23OCP3.SGM 23OCP3 Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules lotter on DSK11XQN23PROD with PROPOSALS3 provision was finalized in 2016, DHS responded to commenters requesting that DHS revise the cap-gap provision so as to automatically extend status and employment authorization ‘‘until adjudication of such H–1B petition is complete.’’ 76 Commenters stated that an extension until October 1 might have been appropriate in the past, when H– 1B petitions were adjudicated well before that date, but USCIS workload issues at the time the rule was promulgated and the need to respond to RFEs delayed such adjudications beyond October 1.77 DHS responded that it recognized that some cap-subject H–1B petitions remain pending on or after October 1 of the relevant fiscal year, but that USCIS prioritizes petitions seeking a COS from F–1 to H–1B, which normally results in the timely adjudication of these requests, so the vast majority of F–1 students changing status to H–1B do not experience any gap in status.78 DHS also explained that it was concerned that extending cap-gap employment authorization beyond October 1 would reward potentially frivolous filings that would enable students who may ultimately be found not to qualify for H–1B status to continue to benefit from the cap-gap extension and that the October 1 cut-off serves to prevent possible abuse of the cap-gap extension.79 DHS has reconsidered its position in light of recent adjudication delays and to avoid potential disruptions in employment authorization. With the consistently high volume of cap-subject H–1B petitions filed within a short period of time each year and the long timeframes afforded to respond to RFEs, USCIS has, in some years, been unable to complete the adjudication of all H– 1B cap-subject petitions by October 1. This has resulted in situations where some individuals must stop working on October 1 because the employment authorization provided under 8 CFR 214.2(f)(5)(vi) ends on that date, although these individuals generally have been allowed to remain in the United States in an authorized period of stay while the H–1B petition and COS application is pending. To account for this operational issue, DHS is proposing to revise 8 CFR 214.2(f)(5)(vi) to provide an automatic extension of F–1 status and postGap Relief for All F–1 Students With Pending H– 1B Petitions,’’ 73 FR 18944 (Apr. 8, 2008). 76 See ‘‘Improving and Expanding Training Opportunities for F–1 Nonimmigrant Students With STEM Degrees and Cap-Gap Relief for All Eligible F–1 Students,’’ 81 FR 13039, 13100 (Mar. 11, 2016). 77 See 81 FR 13040, 13101 (Mar. 11, 2016). 78 Id. 79 Id. VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 completion OPT, or 24-month extension of post-completion OPT, as applicable, until April 1 of the fiscal year for which the H–1B petition is filed, or until the validity start date of the approved H–1B petition, whichever is earlier. This provision would extend the student’s F– 1 status and employment authorization, as applicable, automatically if a nonfrivolous H–1B petition requesting a COS is timely filed on behalf of the F– 1 student. See proposed 8 CFR 214.2(f)(5)(vi)(A). However, if the F–1 student’s COS request is still pending at the end of the cap-gap period, then their employment authorization would terminate on March 31, and the F–1 student would no longer be authorized for employment on this basis as of April 1 of the fiscal year for which H–1B classification is sought. If the H–1B petition underlying the cap-gap extension is denied before April 1, then, consistent with existing USCIS practice, the F–1 beneficiary of the petition, as well as any F–2 dependents, would generally receive the standard F–1 grace period of 60 days to depart the United States or take other appropriate steps to maintain a lawful status.80 If the H–1B petition is still pending on April 1, then the beneficiary of the petition is no longer authorized for OPT and the 60day grace period begins on April 1. The F–1 beneficiary may not work during the 60-day grace period. Changing the automatic extension end date from October 1 to April 1 of the relevant fiscal year would prevent the disruptions in employment authorization that some F–1 nonimmigrants seeking cap-gap extensions have experienced over the past several years. DHS recognizes the hardships that a disruption in employment authorization could cause to both the affected individual and their employer and seeks to prevent potential future disruptions by extending cap-gap relief. According to USCIS data for FY 2016–22, USCIS has adjudicated approximately 99 percent of H–1B capsubject petitions requesting a COS from F–1 to H–1B by April 1 of the relevant fiscal year.81 As a result of this proposed cap-gap extension, DHS expects USCIS would be able to adjudicate nearly all H–1B cap-subject petitions requesting a COS from F–1 to H–1B by the April 1 deadline. In addition to avoiding employment disruptions, the lengthier extension of F–1 status and post-completion OPT or 80 See 8 CFR 214.2(f)(5)(iv). OP&S Policy Research Division (PRD), Computer-Linked Application Information Management System 3 (C3) database, Oct. 27, 2022. PRD187. 81 USCIS, PO 00000 Frm 00019 Fmt 4701 Sfmt 4702 72887 24-month extension of post-completion OPT employment authorization for students with pending H–1B petitions until April 1, which is one year from the typical initial cap filing start date, accounts for USCIS’ competing operational considerations and would enable the agency to balance workloads more appropriately for different types of petitions. Although DHS previously expressed the concern that extending cap-gap employment authorization could potentially enable students who ultimately may be found not to qualify for H–1B status to continue to benefit from the cap-gap extension,82 and thus encourage frivolous filings, DHS has reconsidered its position. It is now DHS’s position that extending the capgap period would not significantly increase the risk of frivolous filings. Because there is no way of knowing whether USCIS would complete adjudication of a petition before October 1 or April 1 of the fiscal year, there should be little incentive to submit a frivolous filing solely to obtain the longer cap-gap extension period. The H– 1B petition would still have to be filed with all appropriate fees, which can be substantial for an initial cap filing. Moreover, if the petition is denied, the beneficiary’s cap-gap eligibility ends immediately. Accordingly, frivolous petitions or petitions filed solely to obtain cap-gap protections would run the risk of simply being denied prior to October 1. This would result in no additional benefit from the expanded timeframe. Any risk of fraud is already inherent in providing cap-gap relief itself, and DHS is unaware of any additional risk presented by extending the cap-gap period. DHS proposes to explicitly state that the H–1B petition must be nonfrivolous at proposed 8 CFR 214.2(f)(5)(vi)(A)(3) to further deter frivolous filings. This would bolster integrity because if USCIS determines the filing to be frivolous, then the beneficiary would not have qualified for the cap-gap protection and may be deemed to have failed to maintain status and, if applicable, worked without authorization. Given the importance of ensuring that the United States attracts and retains top talent from around the globe, DHS believes that the benefits of this proposed cap-gap extension far outweigh the risk of abuse. 3. Start Date Flexibility for Certain H– 1B Cap-Subject Petitions DHS proposes to eliminate all the text currently at 8 CFR 214.2(h)(8)(iii)(A)(4), which relates to a limitation on the 82 See E:\FR\FM\23OCP3.SGM 81 FR 13039, 13101 (Mar. 11, 2016). 23OCP3 72888 Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules lotter on DSK11XQN23PROD with PROPOSALS3 requested start date, because the current regulatory language is ambiguous.83 DHS’s proposal to eliminate the current language at 8 CFR 214.2(h)(8)(iii)(A)(4) would provide clarity and flexibility to employers with regard to the start date listed on H–1B cap-subject petitions. This proposal also would align the regulations related to H–1B cap-subject petitions with current USCIS practice, which is to permit a requested petition start date of October 1 or later, as long as the requested petition start date does not exceed six months beyond the filing date of the petition, even during the initial registration period.84 Other restrictions on the petition start date would remain in place, such as the requirement that a petition may not be filed earlier than six months before the date of actual need. See 8 CFR 214.2(h)(2)(i)(I). Additionally, a petitioner may file an H–1B cap-subject petition on behalf of a registered beneficiary for a particular fiscal year only after the petitioner’s registration for that beneficiary has been selected for that fiscal year. See 8 CFR 214.2(h)(8)(iii)(A)(1). The current regulation at 8 CFR 214.2(h)(8)(iii)(A)(4) states, ‘‘A petitioner may submit a registration during the initial registration period only if the requested start date for the beneficiary is the first day for the applicable fiscal year.’’ This language is ambiguous as to whether the ‘‘requested start date’’ is the start date of the registration or the petition. This has led to confusion as the H–1B cap registration system currently does not ask for the requested start date for the beneficiary. The start date would only be relevant upon the filing of the petition, but the regulation refers to submitting ‘‘a registration with a requested start date.’’ Further, current 8 CFR 214.2(h)(8)(iii)(A)(4) states that, ‘‘If USCIS keeps the registration period open beyond the initial registration period, or determines that it is necessary to re-open the registration period, a petitioner may submit a registration with a requested start date after the first business day for the applicable fiscal year.’’ Given the potential for multiple registration periods, however, the 83 DHS is proposing new language at 8 CFR 214.2(h)(8)(iii)(A)(4) about selecting registrations based on unique beneficiaries. DHS discusses this proposal in detail in the preamble section describing the proposed changes to the H–1B registration system. 84 See USCIS, ‘‘H–1B Electronic Registration Process,’’ https://www.uscis.gov/working-in-theunited-states/temporary-workers/h-1b-specialtyoccupations-and-fashion-models/h-1b-electronicregistration-process (petitioners with a selected registration ‘‘must indicate a start date of Oct. 1 . . . . or later’’) (last visited Nov. 10, 2022). VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 current regulation is potentially confusing regarding the intended start date and what start date a petitioner is permitted to request on a cap-subject petition. As stated above, DHS’s proposal to eliminate the current language at 8 CFR 214.2(h)(8)(iii)(A)(4) would provide clarity and flexibility to employers. The need to eliminate potential confusion regarding permissible requested start dates on cap-subject petitions emerged during the FY 2021 registration and filing season, the first year of the electronic registration process. The electronic registration period for FY 2021 ran from March 1, 2020, to March 20, 2020. First, USCIS selected registrations submitted on behalf of all beneficiaries, including those eligible for the advanced degree exemption. USCIS then selected from the remaining registrations a sufficient number projected to reach the advanced degree exemption. The selection process was completed on March 27, 2020, and USCIS began to notify employers of selection results. The initial petition filing period began on April 1, 2020, and lasted 90 days. Due to multiple factors occurring during the FY 2021 registration and initial filing period (most notably that it was the first year that the electronic registration system was in place as well as it being the early months of the COVID–19 pandemic with its unforeseen consequences), USCIS received fewer petitions than projected as needed to reach the numerical allocations under the statutory cap and advanced degree exemption. In August 2020, USCIS selected additional registrations and permitted those prospective petitioners with a selected registration or registrations to file petitions before November 16, 2020. Due to the additional selection period, the filing window went beyond October 1, leading some petitioners to indicate a start date after October 1, 2020. Although USCIS permitted employers to file petitions after October 1, 2020, USCIS rejected or administratively closed many petitions that did not list a start date of October 1, 2020, pursuant to current 8 CFR 214.2(h)(8)(iii)(A)(4). As a result, many petitioners had to backdate the requested start date on the petition, even though the start date listed on the petition consequently may have been before the start date identified on the accompanying LCA. On June 23, 2021, USCIS announced its reconsideration of those rejected or administratively closed petitions.85 The 85 See USCIS, ‘‘USCIS Will Allow Resubmission of Certain FY 2021 H–1B Petitions Rejected or PO 00000 Frm 00020 Fmt 4701 Sfmt 4702 agency announced that it would permit petitioners to resubmit any FY 2021 H– 1B cap-subject petitions that were rejected or administratively closed solely because the petition requested a start date after October 1, 2020. The proposed changes would eliminate the language at current 8 CFR 214.2(h)(8)(iii)(A)(4), which would clarify for petitioners that they may file H–1B cap-subject petitions with requested start dates that are after October 1 of the relevant fiscal year. This is consistent with current USCIS policy and would eliminate the potential confusion resulting from the current regulation with regard to permissible start dates for employers submitting H–1B cap-subject petitions.86 While the requested start date may be later than October 1, it must be six months or less from the date the petition is filed.87 If the requested start date is more than six months after the petition is filed, the petition will be denied or rejected.88 DHS’s proposal to eliminate the current language at 8 CFR 214.2(h)(8)(iii)(A)(4) would not affect the requirement that an H—1B capsubject petition must be based on a valid registration for the same beneficiary and the same fiscal year. This requirement is reflected in existing USCIS guidance 89 and the current regulation at 8 CFR 214.2(h)(8)(iii)(A)(1), which states that ‘‘A petitioner may file an H–1B capsubject petition on behalf of a registered beneficiary only after the petitioner’s registration for that beneficiary has been selected for that fiscal year.’’ While DHS intends to remove this particular sentence at proposed 8 CFR 214.2(h)(8)(iii)(A)(1) to reflect changes resulting from the beneficiary-centric selection process, DHS proposes to add the same requirement that the registration and petition be for the same fiscal year by adding ‘‘for the same fiscal Closed Due to Start Date,’’ https://www.uscis.gov/ news/alerts/uscis-will-allow-resubmission-ofcertain-fy-2021-h-1b-petitions-rejected-or-closeddue-to-start-date (last visited Jan. 26, 2023). 86 See USCIS, ‘‘H–1B Electronic Registration Process’’ (last reviewed/updated Apr. 25, 2022), https://www.uscis.gov/working-in-the-united-states/ temporary-workers/h-1b-specialty-occupations-andfashion-models/h-1b-electronic-registration-process (Q4: ‘‘If we selected your registration, you must indicate a start date of Oct. 1 . . . or later.’’). 87 See 8 CFR 214.2(h)(2)(i)(I). 88 See id. 89 See USCIS, ‘‘H–1B Specialty Occupations, DOD Cooperative Research and Development Project Workers, and Fashion Models,’’ https:// www.uscis.gov/working-in-the-united-states/h-1bspecialty-occupations (‘‘A cap-subject H–1B petition will not be considered to be properly filed unless it is based on a valid, selected registration for the same beneficiary and the appropriate fiscal year’’.). E:\FR\FM\23OCP3.SGM 23OCP3 Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules year’’ to the immediately preceding sentence discussing the eligibility requirements to file an H—1B capsubject petition based on the registration. Thus, proposed 8 CFR 214.2(h)(8)(iii)(A)(1) would state, ‘‘To be eligible to file a petition for a beneficiary who may be counted against the H–1B regular cap or the H–1B advanced degree exemption for a particular fiscal year, a registration must be properly submitted in accordance with 8 CFR 103.2(a)(1), paragraph (h)(8)(iii) of this section, and the form instructions, for the same fiscal year.’’ C. Program Integrity 1. The H–1B Registration System lotter on DSK11XQN23PROD with PROPOSALS3 Through issuance of a final rule in 2019, Registration Requirement for Petitioners Seeking To File H–1B Petitions on Behalf of Cap-Subject Aliens, DHS developed a new way to administer the H–1B cap selection process to streamline processing and provide overall cost savings to employers seeking to file H–1B capsubject petitions.90 In 2020, USCIS implemented the first electronic registration process for the FY 2021 H– 1B cap. In that year, prospective petitioners seeking to file H–1B capsubject petitions (including for beneficiaries eligible for the advanced degree exemption) were required to first electronically register and pay the associated H–1B registration fee for each prospective beneficiary. Under this process, prospective petitioners (also known as registrants) that seek to employ H–1B cap-subject workers must complete a registration process that requires only basic information about the prospective petitioner and each requested worker. The H–1B selection process is then run on properly submitted electronic registrations. Only those with valid selected registrations are eligible to file H–1B cap-subject petitions. Per regulation, USCIS takes into account historical data related to approvals, denials, revocations, and other relevant factors to calculate the number of petitions needed to meet the H–1B cap for a given fiscal year.91 In 90 See ‘‘Registration Requirement for Petitioners Seeking To File H–1B Petitions on Behalf of CapSubject Aliens,’’ 84 FR 888 (Jan. 31, 2019). 91 See 8 CFR 214.2(h)(8)(iii)(E). VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 making this calculation, USCIS considers the number of registrations that need to be selected to receive the projected number of petitions required to meet the numerical limitations. As stated in the proposed rule for the registration requirement, DHS proposed this new process, ‘‘to reduce costs for petitioners who currently spend significant time and resources preparing petitions and supporting documentation for each intended beneficiary without knowing whether such petitions will be accepted for processing by USCIS due to the statutory allocations.’’ 92 DHS also explained that the registration process, ‘‘would help to alleviate administrative burdens on USCIS service centers that process H–1B petitions since USCIS would no longer need to physically receive and handle hundreds of thousands of H–1B petitions (and the accompanying supporting documentation) before conducting the random selection process.’’ 93 Several stakeholders commented favorably on this proposal, noting that the registration requirement would ‘‘reduce waste and increase efficiency,’’ as well as ‘‘relieve uncertainty for employers and employees, and mitigate burdens on USCIS.’’ 94 The H–1B electronic registration process continues to be well-received by users, who provided a high satisfaction score with the system for FY 2023 (4.84 out of 5) 95 and FY 2022 (4.87 out of 5).96 As DHS noted in the final rule implementing the registration system, USCIS has authority to collect sufficient information for each registration to mitigate the risk that the registration system will be flooded with frivolous registrations.97 For example, USCIS 92 See ‘‘Registration Requirement for Petitioners Seeking To File H–1B Petitions on Behalf of CapSubject Aliens,’’ 83 FR 62406, 62407 (Dec. 3, 2018). 93 Id. at 62407–08. 94 See ‘‘Registration Requirement for Petitioners Seeking To File H–1B Petitions on Behalf of CapSubject Aliens,’’ 84 FR 888, 897 (Jan. 31, 2019). 95 See USCIS, ‘‘H–1B Electronic Registration Process’’ (last updated Apr. 25, 2022), https:// www.uscis.gov/working-in-the-united-states/ temporary-workers/h-1b-specialty-occupations-andfashion-models/h-1b-electronic-registration-process. 96 See American Immigration Lawyers Association, ‘‘USCIS Provides FY2022 H–1B Cap Registration Process Update,’’ https://www.aila.org/ infonet/fy2022-h-1b-cap-registration-processupdate. 97 See ‘‘Registration Requirement for Petitioners Seeking To File H–1B Petitions on Behalf of CapSubject Aliens,’’ 84 FR 888, 900, 904 (Jan. 31, 2019). PO 00000 Frm 00021 Fmt 4701 Sfmt 4702 72889 requires each registrant to complete an attestation and noted in the final rule that ‘‘individuals or entities who falsely attest to the bona fides of the registration and submitted frivolous registrations may be referred to appropriate Federal law enforcement agencies for investigation and further action as appropriate.’’ 98 DHS revised this attestation prior to the FY 2023 cap season, by adding a certification (to which the registrant must attest before submission) that the registration reflects a legitimate job offer, and that the registrant has ‘‘not worked with, or agreed to work with, another registrant, petitioner, agent, or other individual or entity to submit a registration to unfairly increase chances of selection for the beneficiary or beneficiaries in this submission.’’ 99 DHS continues to take steps against potential abuse and is in the process of investigating potential malfeasance and possible referrals to law enforcement agencies. However, the time needed to pursue potential bad actors supports an alternative solution. As a result, DHS has determined that a more effective way to ensure that the registration system continues to serve its purpose of fair and orderly administration of the annual H–1B numerical allocations would be to structurally limit the potential for bad actors to game the system by changing the selection process so that it selects by unique beneficiary rather than by registration. As detailed in the table below, DHS has seen an increase in the number of beneficiaries with multiple registrations submitted on their behalf, an increase in the number and percentage of registrations submitted for beneficiaries with multiple registrations, an increase in the number of beneficiaries having five or more registrations submitted on their behalf, and a substantial increase in the total number of registrations submitted for a unique individual. BILLING CODE 9111–97–P 98 See id. at 900. Office of Management and Budget (OMB) Control Number 1615–0144, Information Collection Request Reference Number 202202–1615–005, supplementary document ‘‘H–1B Registration Tool Copy Deck,’’ https://www.reginfo.gov/public/do/ PRAViewDocument?ref_nbr=202202-1615-005 (received by OMB’s Office of Information and Regulatory Affairs (OIRA) Feb. 28, 2022, and approved without change Aug. 8, 2022). 99 See E:\FR\FM\23OCP3.SGM 23OCP3 72890 Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules Registration Data for FY21-FY23 Table 1 - Reeistration Data FY21 Cap Year Total Reeistrations 274 237 Total number of unique 253,331 beneficiaries* Number of unique 13,443 beneficiaries with 2 or more reeistrations 34,349 Total number of registrations submitted for beneficiaries with multiple reeistrations % of total registrations for 12.5% beneficiaries with multiple reeistrations Number of beneficiaries with 5 700 or more reeistrations Largest number of 18 registrations submitted for 1 beneficiary Source: USCIS Office of Performance and Quality FY22 Cap Year 308 613 235,720 FY23 Cap Year 25,654 49,739 98,547 176,444 31.9% 36.5% 6,369 9,155 41 83 483 927 357,222 While DHS recognizes that simply being the beneficiary of multiple registrations is not necessarily indicative of fraud or misuse, as beneficiaries may legitimately have multiple job offers by different employers that are not working together to game the system, it is still worth noting the significant increase in individuals with multiple registrations for FY22 and FY23. For instance, while DHS is aware that multiple petitioners may submit registrations for a highly qualified beneficiary, it raises red flags if one beneficiary has 41 or 83 registrations submitted on their behalf, which occurred in FY22 and FY23, respectively. Under current regulations, there is no limit on the number of registrations that may be submitted on behalf of one unique individual by different VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 registrants. DHS is not proposing to limit the number of registrations that may be submitted on behalf of a unique individual by different registrants, provided that the registrants are not working with (or have not agreed to work with) another registrant, petitioner, agent, or other individual or entity to submit a registration to unfairly increase the chances of selection for a beneficiary. However, the data show that multiple registrations on behalf of the same individual are increasing. DHS is concerned that this increase in multiple registrations may indicate strategic behavior by registrants (and beneficiaries working with registrants) to submit increasing numbers of registrations, which may be frivolous, to greatly increase a beneficiary’s chance of selection. This negatively affects the PO 00000 Frm 00022 Fmt 4701 Sfmt 4702 integrity of the registration system and selection process. DHS is concerned that individuals with large numbers of registrations submitted on their behalf are potentially misusing the registration system to increase their chances of selection and that the registrations submitted may not represent legitimate job offers. The possible effect of this increase in multiple registrations, which potentially do not represent legitimate job offers, is to skew the selection process. Beneficiaries who have multiple registrations submitted on their behalf have a significantly higher chance of selection. At the same time, an individual’s chance of selection with a single registration is greatly reduced, as the number of beneficiaries with multiple registrations increases. E:\FR\FM\23OCP3.SGM 23OCP3 EP23OC23.007</GPH> lotter on DSK11XQN23PROD with PROPOSALS3 * Unique beneficiaries were identified using country of citizenship and passport number; if passport number was not available, name, date of birth, and country of birth were used to identify beneficiaries. Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules Table 2 - Detailed Data on FY21 Re2istration and Selection Count of Beneficiaries Selected in Number of Registrations First Random Percent of Selection per Count of Beneficiary* Beneficiaries Beneficiaries Process Percent Selected 75 or more - 0.00% - NIA 50 or more - 0.00% - NIA 25 or more - 0.00% - NIA 20 or more - 0.00% - NIA 15 or more 7 0.00% 7 100.00% 10 or more 289 0.11% 289 100.00% 5 or more 700 0.28% 681 97.29% 4 or more 1,259 0.50% 1,173 93.17% 3 or more 3,205 1.27% 2,805 87.52% 2 or more 13,443 5.31% 9,651 71.79% 108,389 45.18% 118,040 46.60% 1 only 239,888 94.69% Total 100.00% beneficiaries 253,331 Source: USCIS Office of Performance and Quality 72891 VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 PO 00000 Frm 00023 Fmt 4701 Sfmt 4725 E:\FR\FM\23OCP3.SGM 23OCP3 EP23OC23.008</GPH> lotter on DSK11XQN23PROD with PROPOSALS3 *Unique beneficiaries were identified using country of citizenship and passport number; if passport number was not available, name, date of birth, and country of birth were used to identify beneficiaries. 72892 Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules Table 3 - Detailed Data on FY22 Reeistration and Selection Count of Beneficiaries Number of Selected in Registrations First Random per Count of Percent of Selection Beneficiary* Beneficiaries Beneficiaries Process Percent Selected 75 or more - 0.00% - NIA 50 or more - 0.00% - NIA 25 or more 44 0.02% 44 100.00% 20 or more 122 0.05% 122 100.00% 15 or more 392 0.17% 392 100.00% 10 or more 1,421 0.60% 1,421 100.00% 5 or more 6,369 2.70% 6,187 97.14% 4 or more 8,743 3.71% 8,329 95.26% 3 or more 13,289 5.64% 11,967 90.05% 2 or more 25,654 10.88% 19,695 76.77% 86,816 41.33% 106,511 45.19% 1 only 210,066 89.12% Total beneficiaries 235,720 100.00% Source: USCIS Office of Performance and Quality VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 PO 00000 Frm 00024 Fmt 4701 Sfmt 4725 E:\FR\FM\23OCP3.SGM 23OCP3 EP23OC23.009</GPH> lotter on DSK11XQN23PROD with PROPOSALS3 *Unique beneficiaries were identified using country of citizenship and passport number; if passport number was not available, name, date of birth, and country of birth were used to identify beneficiaries. Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules Table 4 - Detailed Data on FY23 Reeistration and Selection Count of Beneficiaries Number of Selected in Registrations First Random per Count of Percent of Selection Beneficiary* Beneficiaries Beneficiaries Process 72893 Percent Selected 75 or more 2 0.00% 2 100.00% 50 or more 5 0.00% 5 100.00% 25 or more 108 0.03% 108 100.00% 20 or more 246 0.07% 245 99.59% 15 or more 670 0.19% 665 99.25% 10 or more 2 322 0.65% 2,261 97.37% 5 or more 9,155 2.56% 7,781 84.99% 4 or more 14,261 3.99% 11,169 78.32% 3 or more 24,321 6.81% 16,752 68.88% 2 or more 49,739 13.92% 27,143 54.57% 1 only 307,483 86.08% Total 357,222 beneficiaries 100.00% Source: USCIS Office of Performance and Quality 81,323 26.45% 108,466 30.36% Registration data also show patterns of groups of companies submitting registrations for the same groups of beneficiaries. When selected, these companies then go on to file a minimal number of petitions compared to the VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 number of registrations they submitted for those beneficiaries. The following tables exemplify how one group of companies has submitted large numbers of registrations for a smaller number of common beneficiaries over three fiscal PO 00000 Frm 00025 Fmt 4701 Sfmt 4702 years, with the vast majority of their total registrations made up of beneficiaries for whom other companies in the group also submitted registrations. E:\FR\FM\23OCP3.SGM 23OCP3 EP23OC23.010</GPH> lotter on DSK11XQN23PROD with PROPOSALS3 *Unique beneficiaries were identified using country of citizenship and passport number; if passport number was not available, name, date of birth, and country of birth were used to identify beneficiaries. 72894 Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules Table 5 - Common Beneficiary Data for Group 1 Companies - FY21 Registration Count Selection Count Petition Count Nonfiling Rate* Number of Common Beneficiaries ** A 301 165 5 96.97% 301 100.00% 10.30 B 288 161 5 96.89% 288 100.00% 10.21 C 290 180 1 99.44% 290 100.00% 10.21 D 302 153 8 94.77% 302 100.00% 10.21 E 292 155 5 96.77% 291 99.66% 9.51 F 327 179 4 97.77% 327 100.00% 6.15 G 292 155 2 98.71% 292 100.00% 10.25 H 302 161 6 96.27% 301 99.67% 9.52 I 346 180 3 98.33% 334 96.53% 6.02 J 298 172 3 98.26% 298 100.00% 10.31 K 294 158 1 99.37% 294 100.00% 10.28 L 285 145 7 95.17% 285 100.00% 10.21 M 288 164 8 95.12% Source: USCIS Office of Performance and Quality 287 99.65% 10.15 Company Common Beneficiary Rate of Rew.stration Average Registrations per Beneficiary*** VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 PO 00000 Frm 00026 Fmt 4701 Sfmt 4725 E:\FR\FM\23OCP3.SGM 23OCP3 EP23OC23.011</GPH> lotter on DSK11XQN23PROD with PROPOSALS3 *"Nonfiling Rate" is defined as the percentage of registration selections that do not result in a petition being filed. **Unique beneficiaries were identified using country of citizenship and passport number; if passport number was not available, name, date of birth, and country of birth were used to identify beneficiaries. "Number of Common Beneficiaries" is defined as the number of beneficiaries who were registered for by the company and also at least one more company. ***"Average Registrations per Beneficiary" is defined as the average number of companies that the beneficiaries of the particular company were registered for in the registration. Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules 72895 Table 6 -- Common Beneficiary Data for Group 1 Companies - FY22 Registration Count Selection Count Petition Count Nonfiling Rate* Number of Common Beneficiaries ** A 321 173 10 94.22% 321 100.00% 10.24 B 322 165 13 92.12% 322 100.00% 10.09 C 320 158 10 93.67% 320 100.00% 10.30 D 326 153 11 92.81% 325 99.69% 9.70 E 325 166 7 95.78% 325 100.00% 9.77 F 323 160 8 95.00% 323 100.00% 9.84 G 316 178 19 89.33% 316 100.00% 10.69 H 315 162 10 93.83% 315 100.00% 10.44 I 327 183 14 92.35% 327 100.00% 9.69 J 322 180 15 91.67% 322 100.00% 10.02 K 325 166 9 94.58% 325 100.00% 9.71 L 327 170 10 94.12% 327 100.00% 9.97 M 331 184 8 95.65% Source: USCIS Office of Performance and Quality 331 100.00% 9.50 Company Common Beneficiary Rate of Rew.stration Average Registrations per Beneficiary*** VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 PO 00000 Frm 00027 Fmt 4701 Sfmt 4725 E:\FR\FM\23OCP3.SGM 23OCP3 EP23OC23.012</GPH> lotter on DSK11XQN23PROD with PROPOSALS3 *"Nonfiling Rate" is defined as the percentage of registration selections that do not result in a petition being filed. **Unique beneficiaries were identified using country of citizenship and passport number; if passport number was not available, name, date of birth, and country of birth were used to identify beneficiaries. "Number of Common Beneficiaries" is defined as the number of beneficiaries who were registered for by the company and also at least one more company. ***"Average Registrations per Beneficiary" is defined as the average number of companies that the beneficiaries of the particular company were registered for in the registration. 72896 Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules Table 7 - Common Beneficiary Data for Group 1 Companies - FY23 Registration Count Selection Count Petition Count Nonfiling Rate* Number of Common Beneficiaries ** A 540 180 4 97.78% 540 100.00% 14.68 B 544 182 8 95.60% 544 100.00% 14.56 C 561 189 7 96.30% 560 99.82% 14.27 D 563 181 9 95.03% 563 100.00% 14.39 E 562 175 7 96.00% 562 100.00% 14.50 F 543 198 8 95.96% 542 99.82% 14.69 G 526 204 5 97.55% 526 100.00% 14.85 H 529 191 9 95.29% 528 99.81% 14.88 I 536 196 10 94.90% 536 100.00% 14.77 J 547 212 10 95.28% 545 99.63% 14.74 K 555 205 11 94.63% 555 100.00% 14.27 L 556 199 9 95.48% 556 100.00% 14.87 M 559 198 10 94.95% Source: USCIS Office of Performance and Quality 558 99.82% 14.46 Company Common Beneficiary Rate of Rew.stration Average Registrations per Beneficiary*** The degree of duplication between the companies raises concern that the companies are working with each other to increase their chances of selection. This coupled with the fact that the companies routinely have over 150 registrations selected each year, but only file between 1 and 19 petitions, suggests that the registrations submitted by the companies for the duplicate beneficiaries may not have represented VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 legitimate, bona fide offers of employment. This practice creates a disadvantage for companies that are adhering to the requirements of the registration and selection process. Although there may have been legitimate reasons why a company did not file a petition for a beneficiary whose registration was selected, the non-filing rates for beneficiaries with multiple registrations is significantly higher than that of beneficiaries with PO 00000 Frm 00028 Fmt 4701 Sfmt 4702 single registrations. The non-filing rates for beneficiaries with multiple registrations raises the question of whether these companies actually intended to file an H–1B petition on behalf of the beneficiary when they submitted their registrations and did not work with others to unfairly improve their chance of selection, as they attested to on the Registration Tool when each registration was submitted. E:\FR\FM\23OCP3.SGM 23OCP3 EP23OC23.013</GPH> lotter on DSK11XQN23PROD with PROPOSALS3 *"Nonfiling Rate" is defined as the percentage of registration selections that do not result in a petition being filed. **Unique beneficiaries were identified using country of citizenship and passport number; if passport number was not available, name, date of birth, and country of birth were used to identify beneficiaries. "Number of Common Beneficiaries" is defined as the number of beneficiaries who were registered for by the company and also at least one more company. ***"Average Registrations per Beneficiary" is defined as the average number of companies that the beneficiaries of the particular company were registered for in the registration. Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules 72897 Table 8 - Selection and Petition Filin2 Data lotter on DSK11XQN23PROD with PROPOSALS3 BILLING CODE 9111–97–C The registration data also show that the companies with the highest rates of non-filing submitted a high percentage of registrations for beneficiaries with multiple registrations. In FY23, 97 companies with 10 or more selections had a non-filing rate of 90 percent or greater. Of those 97, the average rate of common beneficiaries among them was 90.72 percent. Eighteen of the 97 companies had a common beneficiary rate of 100 percent. Amongst these 97 companies, the average number of registrations per beneficiary was 8.03. In contrast, the companies with 10 or more selections and a non-filing rate of 10 percent or less, of which there were 667, had an average rate of common beneficiaries of 8.01 percent and submitted registrations for beneficiaries who had an average of 1.40 registrations per beneficiary. Stakeholders have also identified opportunities for improving the registration system in response to a DHS Request for Public Input.100 For instance, several commenters suggested running the selection process based on unique beneficiaries instead of registrations to give all beneficiaries an equal playing field, which is what DHS is proposing with the beneficiary-centric option described below. Commenters also made general suggestions to strengthen the consequences of 100 See ‘‘Identifying Barriers Across U.S. Citizenship and Immigration Services (USCIS) Benefits and Services; Request for Public Input,’’ 86 FR 20398 (Apr. 19, 2021). VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 submitting frivolous registrations, which DHS agrees with and has expanded upon in its proposals. DHS has a strong interest in ensuring that the annual numerical allocations are going to petitioners that truly intend to employ an H–1B worker, rather than prospective petitioners using the registration system as a relatively cheap placeholder for the possibility that they may want to employ an H–1B worker or as a way to game the selection process. The current registration and selection process would benefit from additional guardrails to better ensure the fair allocation of the limited H–1B cap numbers to employers and individuals that are complying with the regulations and have bona fide, legitimate employment in which they intend to employ qualified beneficiaries. Accordingly, this rule proposes to further limit the potential for abuse of the registration process in three ways.101 First, if USCIS determines that a random selection process should be conducted, DHS proposes to shift from 101 In U.S. Citizenship and Immigration Services Fee Schedule and Changes to Certain Other Immigration Benefit Request Requirements, 88 FR 402, 527 (Jan. 4, 2023) (proposed rule), DHS proposed to increase the H–1B registration fee from $10 to $215 per registration submitted. While the underlying purpose of the proposed fee increase is to ensure full cost recovery for USCIS adjudication and naturalization services, DHS recognizes the possibility that the increase in the H–1B registration fee may have an impact on the number of H–1B registrations submitted, including those submitted to improperly increase the chance of selection. However, any potential impact of that separate regulatory proposal is purely speculative. PO 00000 Frm 00029 Fmt 4701 Sfmt 4702 FY22 FY23 86,816 81,323 74,048 85.29% 72,306 88.91% 36,461 29,213 9,757 26.76% 8,831 30.23% selecting by registration, to selecting by unique beneficiary. Under the new proposal, each unique individual who has a registration submitted on their behalf would be entered into the selection process once, regardless of the number of registrations filed on their behalf. By selecting by a unique beneficiary, DHS would better ensure that each individual has the same chance of being selected, regardless of how many registrations were submitted on their behalf. Second, DHS proposes to extend the existing prohibition on related entities filing multiple petitions102 by also prohibiting related entities from submitting multiple registrations for the same individual. Prohibiting related employers from submitting multiple registrations, absent a legitimate business need, would prevent employers from submitting registrations when they would not in fact be eligible to file a petition based on that registration, if selected. Third, DHS proposes to codify USCIS’s ability to deny an H–1B petition or revoke an H–1B petition’s approval when the petition is based on a registration where the statement of facts (including the attestations) was not true and correct, inaccurate, fraudulent, or misrepresented a material fact. 2. Beneficiary Centric Selection Under the proposed update to the random selection process, registrants 102 See E:\FR\FM\23OCP3.SGM 8 CFR 214.2(h)(2)(i)(G). 23OCP3 EP23OC23.014</GPH> FY21 Number of registrations selected where the beneficiary only had one registration submitted and one registration selected (single registration) 108,389 Number of these single registrations that resulted in petition filing 91,925 84.81% Filing rate of single registrations Number of registrations selected where the beneficiary had multiple registrations submitted and multiple registrations selected (multiple registration) 10,504 Number of these multiple registrations that resulted in petition filing 3,835 36.51% Filing rate of multiple registrations Source: USCIS Office of Performance and Quality 72898 Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules lotter on DSK11XQN23PROD with PROPOSALS3 would continue to submit registrations on behalf of beneficiaries and beneficiaries would continue to be able to have more than one registration submitted on their behalf, as allowed by applicable regulations. If a random selection were necessary, then the selection would be based on each unique beneficiary identified in the registration pool, rather than each registration. Each unique beneficiary would be entered in the selection process once, regardless of how many registrations were submitted on their behalf. If a beneficiary were selected, each registrant that submitted a registration on that beneficiary’s behalf would be notified of selection and would be eligible to file a petition on that beneficiary’s behalf. See proposed 8 CFR 214.2(h)(8)(iii)(A)(1) and (4). Changing how USCIS conducts the selection process to select by unique beneficiaries instead of registrations would significantly reduce or eliminate the advantage of submitting multiple registrations for the same beneficiary solely to increase the chances of selection and should give all beneficiaries an equal chance at selection. It could also result in other benefits, such as giving beneficiaries greater autonomy regarding their H–1B employment and improving the chances of selection for legitimate registrations. To ensure that USCIS can accurately identify each potential beneficiary, registrants will continue to be required to submit identifying information about the beneficiaries as part of the registration process. Currently, each registration includes, in addition to other basic information, fields for the registrant to provide the beneficiary’s full name, date of birth, country of birth, country of citizenship, gender, and passport number if the beneficiary has a passport. Although the Registration Final Rule said the passport number would be required and it is requested during registration, registrants have been able to effectively bypass the passport requirement by affirmatively indicating that the beneficiary does not have a passport.103 Because the integrity of the new selection process would rely on USCIS’s ability to accurately identify each individual beneficiary, DHS proposes to require the submission of valid passport 103 In response to a comment in the final rule, DHS responded, ‘‘This final rule requires that each registration include, in addition to other basic information, the beneficiary’s full name, date of birth, country of birth, country of citizenship, gender, and passport number.’’ ‘‘Registration Requirement for Petitioners Seeking To File H–1B Petitions on Behalf of Cap-Subject Aliens,’’ 84 FR 888, 900 (Jan. 31, 2019). VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 information, including the passport number, country of issuance, and expiration date, in addition to the currently required information. See proposed 8 CFR 214.2(h)(8)(iii)(A)(4)(ii). Registrants would no longer be allowed to select an option indicating that the beneficiary does not have a passport. Combined with the other collected biographical information, the passport number would allow USCIS to identify unique individuals more reliably, increasing the likelihood that each individual would have the same opportunity to be selected, if random selection were required. Beneficiaries would be required to supply the same identifying information and passport information to all registrants submitting registrations on their behalf. Each beneficiary would only be able to be registered under one passport, and the registrant would be required to submit the information from the valid passport that the beneficiary intends to use for travel to the United States if issued an H–1B visa. If the beneficiary were already in the United States and were seeking a COS, the registrant would be required to list a valid passport. See proposed 8 CFR 214.2(h)(8)(iii)(A)(4)(ii). Even if a beneficiary had more than one valid passport, such as a beneficiary with dual citizenship, a beneficiary would only be able to be registered under one of those passports. If USCIS determined that registrations were submitted by either the same or different prospective petitioners for the same beneficiary, but using different identifying information, USCIS could find all of those registrations invalid and could deny or revoke the approval of any petition filed based on those registrations. See proposed 8 CFR 214.2(h)(8)(iii)(A)(2). Petitioners would be given notice and the opportunity to respond before USCIS denied or revoked the approval of a petition. Petitioners would be asked to explain and document the identifying information used in the registration process. Petitioners would be encouraged to retain documentation provided by the beneficiary prior to registration, including a copy of the passport. Any H–1B cap-subject petition must contain and be supported by the same identifying information about the beneficiary as provided in the selected registration for the beneficiary named in the petition, and DHS proposes to require that petitioners submit evidence of the passport used at the time of registration to identify the beneficiary. See proposed 8 CFR 214.2(h)(8)(iii)(D)(1). USCIS could deny PO 00000 Frm 00030 Fmt 4701 Sfmt 4702 or revoke the approval of an H–1B petition that does not meet this proposed requirement. USCIS would typically afford the petitioner the opportunity to respond when identifying information provided on the registration does not match the information provided on the petition, and petitioners would need to be prepared to explain and document the reason for any change in identifying information. In its discretion, USCIS could find that a change in identifying information is permissible. Such circumstances could include, but would not be limited to, a legal name change due to marriage, change in gender identity, or a change in passport number or expiration date due to passport renewal, or replacement of a stolen passport, in between the time of registration and filing the petition. See proposed 8 CFR 214.2(h)(8)(iii)(D)(1). DHS recognizes that some individuals may not possess a valid passport, and therefore the proposed passport requirement would require these individuals to obtain a valid passport, at some cost, by the time of registration or even preclude individuals from being registered if they were unable to obtain a valid passport by the time of registration. However, DHS has a strong interest in requiring passport information for each beneficiary, regardless of nationality, to better identify unique beneficiaries and enhance the integrity of the H–1B registration system. Further, DHS believes that requiring passport information is reasonable because each registration should represent a legitimate job offer. Except in limited situations where the Department of State issued a beneficiary a visa on Form DS–232, Unrecognized Passport or Waiver Cases, in the absence of a passport, it is not clear how most beneficiaries could enter the United States in H–1B status pursuant to that job offer. Therefore, the proposed rule, if finalized, would only accelerate the time by which the beneficiary needed to obtain a passport if the beneficiary did not already have a passport. DHS recognizes that stateless individuals may be unable to obtain a valid passport and that this passport requirement could preclude some stateless individuals from being registered. DHS considered proposing an exception to the passport requirement limited solely to stateless individuals, but providing an exception would leave open the risk of registrants submitting a registration for an individual claiming to be stateless and having no passport number and submitting another registration for the E:\FR\FM\23OCP3.SGM 23OCP3 Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules lotter on DSK11XQN23PROD with PROPOSALS3 same individual while listing a passport number. At the registration stage, USCIS would not be able to determine whether those two individuals are the same person or whether the individual is truly stateless. Such a determination would require an adjudication of the claim of statelessness, but USCIS does not adjudicate the registration. Submission of the registration is merely an antecedent procedural requirement to file the petition properly and is not intended to replace the petition adjudication process or assess the eligibility of the beneficiary for the offered position.104 DHS also considered the possibility of generating a unique identifier for stateless individuals, so that registrants could use this number in place of the valid passport number on the registration, but believed this option would run into the same problems of USCIS not being able to verify a claim of statelessness at the registration stage. Furthermore, DHS considered available data for individuals issued H– 1B visas or otherwise granted H–1B status from FYs 2010–23. While the data are imperfect, the data nevertheless suggest that the proposed passport requirement would likely impact a small population of stateless individuals. For instance, available data for FYs 2022 and 2023 show that USCIS received H–1B petitions for nine and four individuals, out of a total of 370,110 and 94,649 H–1B petitions, respectively, whose country of citizenship were listed as ‘‘stateless.’’ 105 This represents just 0.0024 percent and 0.0042 percent, respectively, of all H–1B petitions received those fiscal years. These data do not show whether the stateless individuals had a valid passport upon their admission into the United States in H–1B status; these data also do not show whether any of the four individuals for FY 2023 were the same as some of the nine individuals reported for FY 2022. Further, the DOS data show that, between FYs 2010–22, a total of 89 H–1B visas out of a total of 1,988,856 H–1B visas were issued to individuals whose nationalities were listed as ‘‘no nationality.’’ 106 This total represents just 0.0045 percent of all H– 104 See ‘‘Registration Requirement for Petitioners Seeking To File H–1B Petitions on Behalf of CapSubject Aliens,’’ 84 FR 888, 900 (Jan. 31, 2019). 105 See USCIS, OP&S Policy Research Division (PRD), I–129—H–1B Petitions reported with Stateless Country of Citizenship, ELIS Petitions FYs 2020–23, PRD 252. The reported numbers do not include beneficiaries whose country of citizenship information was missing, blank, or unknown. The reported numbers for FY 2020 and FY 2021 were both zero, as USCIS was not using ELIS at that time. 106 DOS, ‘‘Visa Statistics,’’ https://travel.state.gov/ content/travel/en/legal/visa-law0/visastatistics.html (last visited Mar. 16, 2023). VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 1B visas issued during those years. These data do not show how many of the 89 total H–1B visas were issued to unique individuals, as individuals could have been issued more than one visa during this twelve-year timeframe. Again, while acknowledging that the above data are imperfect, DHS recognizes that not providing an exception or alternative to the passport requirement would potentially impact stateless individuals who might be approved for H–1B visas but would be ineligible because they are unable to obtain a passport. DHS continues to consider options and alternatives to the passport requirement for stateless individuals and welcomes public comment on this issue as well as the costs and benefits for both petitioners and beneficiaries of requiring a passport number at registration. As discussed above, conducting the registration selection process based on unique beneficiaries would significantly reduce or remove the advantage of submitting multiple registrations solely to increase the chances of selection and better allow for an equal playing field for both employers and beneficiaries, while continuing to allow beneficiaries to have multiple job offers and multiple registrations. This would significantly reduce or remove an incentive for employers and individuals to pursue registration without the existence of a bona fide job offer and an intent to employ the individual for each registration. The proposed change would potentially benefit beneficiaries by giving them greater autonomy to choose the employer for whom they ultimately work. If multiple unrelated companies submitted registrations for a beneficiary and the beneficiary were selected, then the beneficiary could have greater bargaining power or flexibility to determine which company or companies could submit an H–1B petition for the beneficiary, because all of the companies that submitted a registration for that unique beneficiary would be notified that their registration was selected and they are eligible to file a petition on behalf of that beneficiary. Under the current selection process, however, the beneficiary could only be petitioned for by the specific company that submitted the selected registration. While another company could subsequently file a petition for concurrent employment, the beneficiary would still have to be initially employed in H–1B status by the same company that filed the initial capsubject petition based on the selected registration. PO 00000 Frm 00031 Fmt 4701 Sfmt 4702 72899 The proposed change may also potentially benefit companies that submit legitimate registrations for unique beneficiaries by increasing their chances to employ a specific beneficiary in H–1B status. Again, under the current selection process, a company could file a petition for and employ a beneficiary in H–1B status only if their registration for that specific beneficiary was selected. Under the proposed beneficiary-centric selection process, any company that submitted a registration for a selected beneficiary could file a petition for and potentially employ a beneficiary in H–1B status because all of the prospective petitioners that submitted a registration for that selected beneficiary would receive a selection notice. As previously discussed, the data show that the current system may result in an unfair advantage of selection for registrations potentially involving prospective petitioners that worked together to submit multiple registrations for the same beneficiary to unfairly improve their chance of selection. The beneficiary-centric process is intended to correct this and level the playing field for companies submitting legitimate registrations for unique beneficiaries and not attempting to unfairly improve their chance of selection. DHS is also proposing minor changes to 8 CFR 214.2(h)(8)(iii)(A)(5) through (7) and (h)(8)(iii)(E) to conform the regulatory text to the proposed new selection process and clarify that USCIS would select ‘‘beneficiaries’’ rather than ‘‘registrations.’’ DHS expects USCIS to have sufficient time to develop, thoroughly test, and implement the modifications to the registration system and selection process and give stakeholders sufficient time to adjust to these new procedures by the time the rule finalizing this proposed rule would publish and become effective. USCIS has already begun planning the development work of the new selection process in the electronic H–1B registration tool. As indicated before, DHS may move to finalize certain provisions through one or more final rules after carefully considering all public comments and may possibly do so in time for the FY 2025 cap season, depending on agency resources. In particular, DHS may seek to finalize the provisions relating to the beneficiary centric registration selection process in proposed 8 CFR 214.2(h)(8)(iii)(A)(4) before moving to finalize the other proposed provisions in a separate rule. However, DHS and USCIS cannot predict, with certainty, agency resources for the next few years or even when the E:\FR\FM\23OCP3.SGM 23OCP3 72900 Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules lotter on DSK11XQN23PROD with PROPOSALS3 final rule would publish. Therefore, there is also the possibility that DHS would need to delay the effective date of 8 CFR 214.2(h)(8)(iii)(A)(4). This delayed effective date might only apply to the proposed changes describing the beneficiary-centric selection process and, in that case, would not impact any other provisions in this proposed rule, if finalized. DHS may need to delay the effective date if it determines that USCIS does not have sufficient time to ensure proper functionality of the beneficiarycentric selection process, including completing all requisite user testing. DHS may need to delay the effective date for other reasons as well, such as to avoid the confusion that could result if the final rule took effect too close to the start of the initial registration period for the upcoming cap season, or to avoid disparate treatment of registrations if the final rule took effect in the middle of the initial registration period, or during a subsequent registration and selection period, particularly if USCIS needed to open a subsequent registration period later that year. In the event DHS needed to further delay the effective date of these provisions beyond the effective date of the final rule, DHS would publish a Federal Register Notice advising the regulated public of the new delayed effective date. That Federal Register Notice would be published at least 30 calendar days in advance of the first date of the initial registration period. 3. Bar on Multiple Registrations Submitted by Related Entities DHS regulations already preclude the filing of multiple H–1B cap-subject petitions by related entities for the same beneficiary, unless the related petitioners can establish a legitimate business need for filing multiple capsubject petitions for the same beneficiary. See 8 CFR 214.2(h)(2)(i)(G). DHS is not proposing to change that, but, rather, is proposing to extend a similar limitation to the submission of registrations. See proposed 8 CFR 214.2(h)(2)(i)(G). When an employer submits a registration, they attest on the H–1B Registration Tool that they intend to file a petition based on that registration. If two related employers submit registrations for a cap-subject petition for the same beneficiary, without a legitimate business need, both employers are attesting to their intent to file a petition for that beneficiary. If they are both selected, and they lack a legitimate business need, they are left with one of two choices: (1) both file petitions in violation of 8 CFR 214.2(h)(2)(i)(G); or (2) do not file and VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 potentially violate the attestation made at the time of registration. Therefore, employers are left with two bad options. To allow related employers to submit registrations, but not allow them to file petitions, creates an inconsistency between the antecedent procedural step of registration and the petition filing. Extending the bar on multiple petition filings by related entities to multiple registration submissions by related entities for the same cap-subject beneficiary would harmonize the expectations for petition filing and registration submission. While DHS anticipates that changing the way beneficiaries are selected would reduce frivolous registrations and their negative effects, DHS cannot guarantee with certainty that this change would completely eliminate entities from working with each other to submit registrations to unfairly increase chances of selection for a beneficiary by submitting slightly different identifying information or other means that DHS cannot anticipate. Therefore, adding this provision would serve as an additional tool available to DHS to militate against such abuse and bolster the integrity of the registration process. Furthermore, proposed 8 CFR 214.2(h)(2)(i)(G) is necessary because of the possibility that registration could be suspended, or that the implementation of the beneficiarycentric selection process could be delayed. If registration were suspended, the bar on multiple petitions would still be relevant, and if implementation of the beneficiary-centric selection process were delayed, the bar on multiple registrations would still be relevant. 4. Registrations With False Information or That Are Otherwise Invalid Although registration is an antecedent procedural step undertaken prior to filing an H–1B cap-subject petition, the validity of the registration information is key to the registrant’s eligibility to file a petition. The information contained in the registration, including the required attestations, must be valid. Currently, the regulations state that it is grounds for denial or revocation if the statements of facts contained in the petition are not true and correct, inaccurate, fraudulent, or misrepresented a material fact.107 In this rule, DHS proposes to codify that those requirements extend to the information provided in the registration and to make clear that this includes if attestations on the registration are determined to be false. See proposed 8 107 See 8 CFR 214.2(h)(10)(ii) and (h)(11)(iii)(A)(2). PO 00000 Frm 00032 Fmt 4701 Sfmt 4702 CFR 214.2(h)(10)(ii) and (iii) and (h)(11)(iii)(A)(2). To allow companies to provide false information on the registration without consequence would allow them to potentially take a cap number for which they are ineligible. As such, DHS proposes codifying that providing untrue, incorrect, inaccurate, or fraudulent statements of fact, or misrepresenting material facts, including providing false attestations on the registration, would be grounds for denial or revocation of the petition that was based on that registration. DHS is also proposing changes to the regulations governing registration that would provide USCIS with clearer authority to deny or revoke the approval of a petition based on a registration that was not properly submitted or was otherwise invalid. Specifically, DHS is proposing to add that if a petitioner submits more than one registration per beneficiary in the same fiscal year, all registrations submitted by that petitioner relating to that beneficiary for that fiscal year may be considered not only invalid, but that ‘‘USCIS may deny or revoke the approval of any petition filed for the beneficiary based on those registrations.’’ See proposed 8 CFR 214.2(h)(8)(iii)(A)(2). Additionally, DHS is proposing to add that USCIS may deny or revoke the approval of an H–1B petition if it determines that the fee associated with the registration is declined, not reconciled, disputed, or otherwise invalid after submission. See proposed 8 CFR 214.2(h)(8)(iii)(D)(2). DHS is also proposing a new provision that adds an invalid registration as a ground for revocation. See proposed 8 CFR 214.2(h)(11)(iii)(A)(6). Through these provisions, DHS aims to bolster the integrity of the registration system. 5. Alternatives Considered DHS considered the alternative of eliminating the registration system and reverting to the paper-based filing system stakeholders used prior to implementing registration. However, when DHS considered the immense cost savings that registration provides to both USCIS and stakeholders and the significant resources the agency would incur to revert back to a paper-based filing system for all cap-subject cases, the benefits of having a registration system still outweigh the costs and any potential problems caused by frivolous filings. As a result, DHS is proposing to make changes to the registration system to improve it and militate against the potential for frivolous filings. DHS continues to consider options to E:\FR\FM\23OCP3.SGM 23OCP3 Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules improve the registration system and welcomes public comment on this issue. 6. Provisions To Ensure Bona Fide Job Offer for a Specialty Occupation Position lotter on DSK11XQN23PROD with PROPOSALS3 a. Contracts Under proposed 8 CFR 214.2(h)(4)(iv)(C), DHS proposes to codify USCIS’ authority to request contracts, work orders, or similar evidence, in accordance with 8 CFR 103.2(b) (USCIS may request additional evidence if the evidence submitted does not establish eligibility) and 8 CFR 214.2(h)(9) (‘‘USCIS will consider all the evidence submitted and any other evidence independently required to assist in adjudication.’’). Such evidence may take the form of contracts or legal agreements, if available, or other evidence including technical documentation, milestone tables, or statements of work. Evidence submitted should show the contractual relationship between all parties, the terms and conditions of the beneficiary’s work, and the minimum educational requirements to perform the duties. Uncorroborated statements about a claimed in-house project for a company with no history of developing projects in-house, standing alone, would generally be insufficient to establish that the claimed in-house work exists. The submitted contracts should include both the master services agreement and accompanying statement(s) of work (or similar legally binding agreements under different titles) signed by an authorized official of any party in the contractual chain, including the petitioner, the end-client company for which the beneficiary will perform work, and any intermediary or vendor company. In general, the master services agreement (also commonly called a supplier agreement) sets out the essential contractual terms and provides the basic framework for the overall relationship between the parties.108 The statement of work (also commonly called a work order) provides more specific information, such as the scope of services to be performed, details about the services, and the allocation of responsibilities among the parties.109 The petitioner may also submit letters signed by an authorized official of the end-client company for which the 108 See 3 David M. Adlerstein et at., Successful Partnering Between Inside and Outside Counsel sec. 49:35. 109 See 3 David M. Adlerstein et at., Successful Partnering Between Inside and Outside Counsel sec. 49:37. VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 beneficiary will work and any intermediary or vendor company. Other types of documentation petitioners may provide include technical documentation, milestone tables, marketing analyses, cost-benefit analyses, brochures, and funding documents. Overall, these documents should be detailed enough to provide a sufficiently comprehensive view of the position being offered to the beneficiary and the terms and conditions under which the work would be performed. The documentation should also include the minimum educational requirements to perform the duties. Documentation that merely sets forth the general obligations of the parties to the agreement, or that does not provide specific information pertaining to the actual work to be performed, would generally be insufficient.110 Through proposed 8 CFR 214.2(h)(4)(iv)(C), DHS seeks to put stakeholders on notice of the kinds of evidence that could be requested to establish the terms and conditions of the beneficiary’s work and the minimum educational requirements to perform the duties. This evidence, in turn, could establish that the petitioner has a bona fide job offer for a specialty occupation position for the beneficiary. DHS is proposing conforming changes to the introductory paragraph (h)(4)(iv) to distinguish the types of evidence that are required as initial evidence addressed in paragraphs (h)(4)(iv)(A) and (B), from the evidence USCIS may request under new paragraph (h)(4)(iv)(C). b. Non-Speculative Employment DHS proposes to codify its requirement that the petitioner must establish, at the time of filing, that it has a non-speculative position in a specialty occupation available for the beneficiary as of the start date of the validity period as requested on the petition. See proposed 8 CFR 214.2(h)(4)(iii)(F). This change is consistent with current DHS policy guidance that an H–1B petitioner 110 When requested evidence may contain trade secrets, for example, the petitioner may redact or sanitize the relevant sections to provide a document that is still sufficiently detailed and comprehensive, yet does not reveal sensitive commercial information. However, it is critical that the unredacted information contain all information necessary for USCIS to adjudicate the petition. Although a petitioner may always refuse to submit confidential commercial information, if it is deemed too sensitive, the petitioner must also satisfy the burden of proof and runs the risk of denial. Cf. Matter of Marques, 16 I&N Dec. 314, 316 (BIA 1977) (in refusing to disclose material and relevant information that is within his knowledge, the respondent runs the risk that he may fail to carry his burden of persuasion with respect to his application for relief). PO 00000 Frm 00033 Fmt 4701 Sfmt 4702 72901 must establish that employment exists at the time of filing the petition and that it will employ the beneficiary in a specialty occupation.111 The requirement of non-speculative employment derives from the statutory definition of an H–1B nonimmigrant worker as someone who is ‘‘coming temporarily to the United States to perform services . . . in a specialty occupation . . . .’’ See INA section 101(a)(15)(H)(i)(b), 8 U.S.C. 1101(a)(15)(H)(i)(b). To determine whether the H–1B worker will perform services in a specialty occupation as required, USCIS must examine the nature of the services the beneficiary will perform in the offered position. Where the proposed position is speculative, meaning that it is undetermined, then the petitioner will not be able to establish the nature of the offered position. Speculative employment precludes the agency from ascertaining whether those duties normally require the attainment of a U.S. bachelor’s or higher degree in a directly related specific specialty to qualify the position as a specialty occupation, and whether the beneficiary has the appropriate qualifications to perform those duties. Speculative employment undermines the integrity and a key goal of the H–1B program, which is to help U.S. employers obtain the skilled workers they need to conduct their business, subject to annual numerical limitations, while protecting the wages and working conditions of U.S. workers. DHS believes that expressly prohibiting speculative employment, consistent with current practice, would align with Congressional intent and would prevent possible misunderstanding of the specialty occupation eligibility requirement. The agency has long held and communicated the view that speculative employment is not permitted in the H– 1B program. For example, a 1998 proposed rule documented this position, stating that, historically, USCIS (or the Service, as it was called at the time) has not granted H–1B classification on the basis of speculative, or undetermined, prospective employment.112 That proposed rule explained that the H–1B classification was not intended as a vehicle for a person to engage in a job search within the United States, or for 111 See USCIS, ‘‘Rescission of Policy Memoranda,’’ PM–602–0114 (June 17, 2020) (citing Matter of Chawathe, 25 I&N Dec. 369 (AAO 2010)). 112 See ‘‘Petitioning Requirements for the H Nonimmigrant Classification,’’ 63 FR 30419, 30419– 30420 (June 4, 1998) (proposed rule to be codified at 8 CFR part 214). E:\FR\FM\23OCP3.SGM 23OCP3 72902 Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules employers to bring in temporary foreign workers to meet possible workforce needs arising from potential business expansions or the expectation of potential new customers or contracts.113 If the employment is speculative, USCIS is unable to properly analyze the intended employment and determine whether the position is a specialty occupation.114 Note, however, that establishing nonspeculative employment does not mean demonstrating non-speculative daily work assignments through the duration of the requested validity period. DHS does not propose to require employers to establish non-speculative and specific assignments for every day of the intended period of employment.115 Again, under proposed 8 CFR 214.2(h)(4)(iii)(F), a petitioner must demonstrate, at the time of filing, availability of non-speculative employment as of the requested start date. However, DHS does not require a petitioner to identify and document the beneficiary’s specific day-to-day assignments.116 DHS also does not intend to limit validity periods based on the end-date of contracts, work orders, itineraries, or similar documentation. Speculative employment should not be confused with employment that is contingent on petition approval, visa issuance (when applicable), or the grant of H–1B status. DHS recognizes that employment may be actual, but contingent on petition approval, visa 113 See id. at 30420. id. See also Government Accountability Office, ‘‘H–1B Foreign Workers: Better Controls Needed to Help Employers and Protect Workers,’’ GAO/HEHS–00–157 (Sept. 2000), https:// www.gao.gov/assets/hehs-00-157.pdf (‘‘The petition is required to contain the necessary information to show that a bona fide job exists . . . .’’); Serenity Info Tech, Inc. v. Cuccinelli, 461 F. Supp. 3d 1271, 1286 (N.D. Ga. 2020) (‘‘Demonstrating that the purported employment is actually likely to exist for the beneficiary is a basic application requirement . . . .’’). 115 See ITServe Alliance, Inc. v. Cissna, 443 F. Supp. 3d 14, 39 (D.D.C. 2020) (the U.S. District Court for the District of Columbia, in considering a requirement that an H–1B petitioner establish non-speculative assignments for the entire time requested in a petition, explained that ‘‘very few, if any, U.S. employer would be able to identify and prove daily assignments for the future three years for professionals in specialty occupations’’ and that ‘‘[n]othing in [the statutory definition of ‘specialty occupation’] requires specific and non-speculative qualifying day-to-day assignments for the entire time requested in the petition’’); Serenity Info Tech, 461 F. Supp. 3d at 1286 (agreeing with the determination by the court in ITServe Alliance that the statute does not require specific and nonspeculative qualifying day-to-day assignments). 116 USCIS, ‘‘Rescission of Policy Memoranda,’’ PM–602–0114 at 3 (June 17, 2020) (stating that ‘‘a petitioner is not required to identify and document the beneficiary’s specific day-to-day assignments’’). lotter on DSK11XQN23PROD with PROPOSALS3 114 See VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 issuance, or the beneficiary being granted H–1B status. c. LCA Corresponds With the Petition DHS is proposing to update the regulations to expressly include DHS’s existing authority to ensure that the LCA properly supports and corresponds with the accompanying H–1B petition. The proposed text at 8 CFR 214.2(h)(4)(i)(B)(1)(ii) would align DHS regulations with existing DOL regulations, which state that DHS has the authority to determine whether the LCA supports and corresponds with the H–1B petition. See 20 CFR 655.705(b). It would also codify DHS’s authority to determine whether all other eligibility requirements have been met, such as whether the beneficiary for whom H–1B classification is sought qualifies to perform services in the specialty occupation as prescribed in INA section 214(i)(2), 8 U.S.C. 1184(i)(2). While DHS already has the authority under INA sections 101(a)(15)(H)(i)(b), 103(a), and 214(a)(1) and (c)(1), 8 U.S.C. 1101(a)(15)(H)(i)(b), 1103(a), and 1184(a)(1) and (c)(1), to determine whether the LCA supports and corresponds with the H–1B petition, this authority currently is only stated in DOL’s regulations and not in DHS’s regulations.117 By adding it to DHS regulations, DHS would align its regulations with existing DOL regulations, which would add clarity and provide transparency to stakeholders. The current statute and regulations require that a petitioner file an LCA certified by the Secretary of Labor with its H–1B petition, unless filing for certain Department of Defense workers.118 Among other information, the employer must provide the prevailing wage rate, occupational classification (‘‘Standard Occupational Classification (SOC) occupational title’’),119 and place of employment for the offered position on the LCA. The employer must attest on the LCA that it will pay the beneficiary the higher of the prevailing wage for the occupational classification in the area of employment 117 See 20 CFR 655.705(b). INA section 212(n)(1); 8 CFR 214.2(h)(1)(ii)(B)(1); (h)(4)(i)(B)(1) and (2); (h)(4)(iii)(B). 119 SOC refers to the Standard Occupational Classification code system, a classification system used by the DOL and other Federal agencies to categorize occupations. See BLS, ‘‘Standard Occupational Classification,’’ https://www.bls.gov/ soc/ (last visited Oct. 26, 2022); OMB, ‘‘Statistical Programs & Standards,’’ https:// www.whitehouse.gov/omb/information-regulatoryaffairs/statistical-programs-standards/ (last visited Oct. 26, 2022). 118 See PO 00000 Frm 00034 Fmt 4701 Sfmt 4702 or the employer’s actual wage.120 It must also attest to the truthfulness and accuracy of the information provided on the LCA.121 DHS proposes to amend existing regulations to state clearly that, although the Secretary of Labor certifies the LCA, DHS has the authority and obligation to determine whether the certified LCA properly supports and corresponds with the H–1B petition.122 DHS also proposes to amend the regulations to clarify its existing authority and obligation to determine whether all eligibility requirements for H–1B classification have been met.123 This proposed regulation would more clearly summarize DHS’s existing authority under INA section 101(a)(15)(H)(i)(b), 103(a), and 214(a)(1) and (c)(1), 8 U.S.C. 1101(a)(15)(H)(i)(b), 1103(a), and 1184(a)(1) and (c)(1). This authority is also referenced, in part, in DOL’s regulation at 20 CFR 655.705(b), which states in pertinent part that DHS accepts an employer’s H–1B petition with the DOL-certified LCA attached, and in doing so, ‘‘DHS determines whether the petition is supported by an LCA which corresponds with the petition’’ and otherwise meets the statutory requirements for the classification.124 Thus, DHS’s proposed regulation would mirror DOL regulations and expressly clarify DHS’s existing authority with respect to reviewing the certified LCA within the context of adjudicating the H–1B petition. When determining whether the submitted certified LCA properly 120 See 20 CFR 655.730–655.731. id. 122 There are four Federal agencies involved in the process relating to H–1B nonimmigrant classification and employment: DOL, DOS, U.S. Department of Justice, and DHS. In general, DOL administers the LCA process and LCA enforcement provisions. As noted, DHS determines, among other things, whether the petition is properly supported by an LCA that corresponds with the petition, whether the occupation named in the LCA is a specialty occupation, and whether the qualifications of the nonimmigrant meets the statutory and regulatory requirements for H–1B visa classification. Department of Justice administers the enforcement and disposition of complaints regarding an H–1B–dependent or willful violator employer’s failure to offer an H–1B position to an equally or better qualified U.S. worker, or such employer’s willful misrepresentation of material facts relating to this obligation. DOS, through U.S. Embassies and consulates, is responsible for issuing H–1B visas. See 20 CFR 655.705. 123 See, e.g., 8 U.S.C. 1184(c)(1) (stating ‘‘[t]he question of importing any alien as a nonimmigrant under subparagraph (H) . . . in any specific case or specific cases shall be determined by the [Secretary of Homeland Security]’’). 124 See Matter of Simeio Solutions, LLC, 26 I&N Dec. 542, 546 n.6 (AAO 2015) (‘‘USCIS must determine whether the attestations and content of an LCA correspond to and support the H–1B visa petition’’). 121 See E:\FR\FM\23OCP3.SGM 23OCP3 Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules corresponds with the petition, consistent with current practice, USCIS would consider all the information on the LCA, including, but not limited to, the standard occupational classification (SOC) code, wage level (or an independent authoritative source equivalent), and location(s) of employment. USCIS would evaluate whether that information sufficiently aligns with the offered position, as described in the rest of the record of proceeding. In other words, USCIS would compare the information contained in the LCA against the information contained in the petition and supporting evidence. USCIS would not, however, supplant DOL’s responsibility with respect to wage determinations. The wage level is not solely determinative of whether the position is a specialty occupation. DHS notes that the LCA, H–1B petition, and supporting documentation must be for the same position; however, the same position does not necessarily mean that all information describing the position must be identical. A petitioner may legitimately supplement or clarify the record with additional information about the offered position in response to an RFE, on motion, or on appeal. So long as the supplemental information does not materially change the position described in the original H–1B petition, DHS would consider the position to be the same. DHS would view a change to be material for these purposes if the change would have required the petitioner to file an amended or new petition with the corresponding LCA or if the change was made to make the position description comport with an originally submitted LCA.125 Additionally, DHS proposes to improve 8 CFR 214.2(h)(4)(i)(B), by redesignating existing paragraphs (h)(4)(i)(B)(1) through (6) as proposed paragraphs (h)(4)(i)(B)(1)(i) through (vi) and adding a new heading to clarify that these provisions all relate to LCA requirements. DHS is also proposing technical changes throughout this section, such as replacing ‘‘shall’’ with ‘‘must,’’ ‘‘application’’ with ‘‘certified lotter on DSK11XQN23PROD with PROPOSALS3 125 See 8 CFR 103.2(b)(1) (an applicant or petitioner must establish eligibility at the time of filing); 8 CFR 214.2(h)(2)(i)(E) (petitioner must file a new or amended petition with USCIS to reflect any material change in the terms and conditions of employment or the foreign citizen’s eligibility for H–1B status); Matter of Simeio Solutions, LLC, 26 I&N Dec. 542, 547 (AAO 2015) (‘‘When there is a material change in the terms and conditions of employment, the petitioner must file an amended or new H–1B petition with the corresponding LCA. 8 CFR 214.2(h)(2)(i)(E).’’). See also Matter of Izummi, 22 I&N Dec. 169, 176 (Assoc. Comm’r 1998) (a petitioner may not make material changes to a petition in an effort to make a deficient petition conform to USCIS requirements). VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 labor condition application,’’ and ‘‘the Service’’ with ‘‘USCIS,’’ for additional clarity. In separate provisions that are also related to the LCA, DHS proposes to revise the grounds for denial or revocation related to the statements of facts contained in the petition, TLC, or the LCA. See proposed 8 CFR 214.2(h)(10)(ii) and (h)(11)(iii)(A)(2). This would codify DHS’s current practices, as the LCA is incorporated into and considered part of the H–1B petition, just like the TLC is incorporated into and considered part of the H–2A or H–2B petition.126 While current 8 CFR 214.2(h)(11)(iii)(A)(2) already refers to the ‘‘temporary labor certification,’’ it does not expressly refer to the ‘‘labor condition application.’’ DHS proposes to add an express reference to the LCA in proposed 8 CFR 214.2(h)(11)(iii)(A)(2) to resolve any doubts that a false statement on the LCA—just like a false statement on the TLC—could provide a basis for USCIS to revoke an H petition approval. The purpose of the proposed change to 8 CFR 214.2(h)(10)(ii) is to clarify and better align with the language in proposed 8 CFR 214.2(h)(11)(iii)(A)(2) to expressly reference inaccurate or false statements on the petition, TLC, or LCA, as applicable, as a basis for denial of an H petition. d. Revising the Definition of U.S. Employer DHS is proposing to revise the definition of ‘‘United States employer.’’ Currently, 8 CFR 214.2(h)(4)(ii) defines the term ‘‘United States employer’’ as a person, firm, corporation, contractor, or other association, or organization in the United States that: (1) Engages a person to work within the United States; (2) has an employer-employee relationship with respect to employees under 8 CFR part 214, as indicated by the fact that it may hire, pay, fire, supervise, or otherwise control the work of any such employee; and (3) has an Internal 126 See 8 CFR 103.2(b)(1) (any evidence submitted in connection with a benefit request is incorporated into and considered part of the request); USCIS, ‘‘Rescission of Policy Memoranda,’’ PM–602–0114, at 2 (June 17, 2020) (‘‘The petitioner is required to attest under penalty of perjury on the H–1B petition and LCA that all of the information contained in the petition and supporting documents is complete, true, and correct.’’), https://www.uscis.gov/sites/ default/files/document/memos/PM-602-0114_ ITServeMemo.pdf; Matter of Simeio Solutions, 26 I&N Dec. 542, 546 n.6 (AAO 2015) (‘‘USCIS must determine whether the attestations and content of an LCA correspond to and support the H–1B visa petition, including the specific place of employment. 20 CFR 655.705(b) (2014); see also 8 CFR 214.2(h)(4)(i)(B).’’). PO 00000 Frm 00035 Fmt 4701 Sfmt 4702 72903 Revenue Service Tax identification number. DHS proposes several changes to the ‘‘United States employer’’ definition at 8 CFR 214.2(h)(4)(ii) to bring it in line with our current practice. First, in place of the employer-employee relationship requirement, DHS proposes to codify the existing requirement that the petitioner has a bona fide job offer for the beneficiary to work within the United States. DHS also proposes to replace the requirement that the petitioner ‘‘[e]ngages a person to work within the United States’’ with the requirement that the petitioner have a legal presence and is amenable to service of process in the United States. DHS is not proposing to change the current requirement at 8 CFR 214.2(h)(4)(ii) that the petitioner must have an IRS Tax identification number. e. Employer-Employee Relationship DHS proposes to remove from the definition of U.S. employer the reference to an employer-employee relationship, which, in the past, was interpreted using common law principles and was a significant barrier to the H–1B program for certain petitioners, including beneficiaryowned petitioners. This proposed change is consistent with current USCIS policy guidance, and removing the employer-employee relationship language from the regulations would promote clarity and transparency in the regulations. It would also support DHS’s overall commitment to reducing administrative barriers, including those that unnecessarily impede access to USCIS immigration benefits.127 This proposed change reflects USCIS’s current practices since June 2020, when, following a court order and settlement agreement,128 USCIS formally rescinded its January 2010 policy guidance on the employer-employee relationship analysis under common law.129 As 127 See, e.g., ‘‘Identifying Barriers Across U.S. Citizenship and Immigration Services (USCIS) Benefits and Services; Request for Public Input,’’ 86 FR 20398 (Apr. 19, 2021). 128 See ITServe Alliance, Inc. v. Cissna, 443 F.Supp.3d 14, 19 (D.D.C. 2020) (finding that the USCIS policy interpreting the existing regulation to require a common-law employer-employee relationship violated the Administrative Procedure Act as applied and that the itinerary requirement at 8 CFR 214.2(h)(2)(i)(B) is ultra vires as it pertains to H–1B petitions). 129 See USCIS, ‘‘Rescission of Policy Memoranda,’’ PM–602–0114 (June 17, 2020), https://www.uscis.gov/sites/default/files/document/ memos/PM-602-0114_ITServeMemo.pdf. This memorandum rescinded the USCIS policy memorandum ‘‘Determining Employer-Employee Relationship for Adjudication of H–1B Petitions, Including Third-Party Site Placements,’’ HQ 70/ 6.2.8 (AD 10–24) (Jan. 8, 2010). E:\FR\FM\23OCP3.SGM 23OCP3 lotter on DSK11XQN23PROD with PROPOSALS3 72904 Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules explained in USCIS’s June 2020 policy memorandum ‘‘Rescission of Policy Memoranda,’’ when assessing whether an employer and a beneficiary have an employer-employee relationship under current 8 CFR 214.2(h)(4)(ii), the petitioner need only establish that it meets at least one of the ‘‘hire, pay, fire, supervise, or otherwise control the work of’’ factors with respect to the beneficiary.130 H–1B petitioners are required to submit an LCA attesting that they will pay the beneficiary, see, e.g., 8 CFR 214.2(h)(4)(i)(B), as well as a copy of any written contracts between the petitioner and the beneficiary (or a summary of the terms of the oral agreement under which the beneficiary will be employed, if a written contract does not exist), which typically demonstrates that they will hire and pay the beneficiary, see 8 CFR 214.2(h)(4)(iv). Therefore, H–1B petitioners generally will meet the employer-employee relationship under current 8 CFR 214.2(h)(4)(ii) simply by submitting the required LCA and employment agreement as part of the initial evidence for Form I–129. As a result, the current employer-employee relationship requirement has limited practical value and could be a potential source of confusion if maintained in the regulations. As an additional integrity measure, and as explained in more detail below, DHS is proposing to codify the existing requirement that the petitioner have a bona fide job offer for the beneficiary to work within the United States. As indicated above, the previous analysis created significant barriers to the H–1B program for certain petitioners, including beneficiaryowned petitioners. For example, a beneficiary-owner may have been unlikely to establish a common-law employer-employee relationship with the petitioning entity, even if working for the petitioning entity in a specialty occupation and as a W–2 employee, and thus denied classification as an H–1B specialty occupation worker. Furthermore, USCIS’s previous policy was not entirely consistent with DOL’s regulatory definition of an H–1B employer. DOL’s definition of ‘‘employer’’ at 20 CFR 655.715 states, in pertinent part, ‘‘In the case of an H–1B nonimmigrant (not including E–3 and H–1B1 nonimmigrants), the person, firm, contractor, or other association or organization in the United States that files a petition with [USCIS] on behalf of the nonimmigrant is deemed to be the employer of that nonimmigrant.’’ The definition further states, ‘‘In the case of 130 Id. at 2. VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 an E–3 and H–1B1 nonimmigrant, the person, firm, contractor, or other association or organization in the United States that files an LCA with [DOL] on behalf of the nonimmigrant is deemed to be the employer of that nonimmigrant.’’ As a result of USCIS’s 2010 policy guidance, it was often the case that USCIS concluded a petitioner was not an employer for purposes of the H–1B petition even though DOL deemed that same petitioner to be an employer for purposes of the LCA. This disparity increased the potential for confusion among H–1B stakeholders. It is in DHS’s interests to promote, to the extent possible, a more consistent framework among DHS and DOL regulations for H– 1B, E–3, and H–1B1 petitions and to increase clarity for stakeholders. However, the proposed removal of the employer-employee requirement from 8 CFR 214.2(h)(4)(ii) is not intended to narrow in any way the scope of petitioners against whom DOL may enforce the H–1B labor requirements. f. Bona Fide Job Offer Under the second prong of the definition of ‘‘U.S. employer’’ at 8 CFR 214.2(h)(4)(ii), DHS proposes to codify the existing requirement that the petitioner have a bona fide job offer for the beneficiary to work within the United States.131 While this requirement is not currently expressly stated in the regulations, it is reflected in current USCIS policy guidance, which states that the petitioner must establish that ‘‘[a] bona fide job offer . . . exist[s] at the time of filing.’’ 132 This proposed change would also be consistent with the current H–1B Registration Tool, where the petitioner must attest at the time of registration that each registration for an H–1B capsubject beneficiary reflects a legitimate job offer. DHS’s proposal to codify the requirement for a bona fide job offer requirement would complement DHS’s proposal to codify the requirement to 131 Consistent with existing practice, the phrase ‘‘within the United States’’ does not and would not prohibit H–1B nonimmigrants from travelling internationally. 132 See USCIS, ‘‘Rescission of Policy Memoranda,’’ PM–602–0114 (June 17, 2020); see also USCIS, Adjudicator’s Field Manual (AFM) Chapter 31.3(g)(4) at 24, ‘‘H1–B Classification and Documentary Requirements has been partially superseded as of June 17, 2020,’’ available at https://www.uscis.gov/sites/default/files/document/ policy-manual-afm/afm31-external.pdf (last visited Sept. 5, 2023) (‘‘The burden of proof falls on the petitioner to demonstrate the need for such an employee. Unless you are satisfied that a legitimate need exists, such a petition may be denied because the petitioner has failed to demonstrate that the beneficiary will be employed in a qualifying specialty occupation.’’). While USCIS retired the AFM in May 2020, this example nevertheless illustrates the agency’s historical interpretation. PO 00000 Frm 00036 Fmt 4701 Sfmt 4702 demonstrate a non-speculative position in a specialty occupation for the beneficiary at proposed 8 CFR 214.2(h)(4)(iii)(F). DHS proposes to codify the bona fide job offer requirement in place of the current requirement that the petitioner ‘‘[e]ngages a person to work within the United States’’ under the first prong of current 8 CFR 214.2(h)(4)(ii). As currently written, the requirement for a petitioner to ‘‘engage[ ] a person to work within the United States’’ has limited practical value because it does not specify that the petitioner should engage the beneficiary (rather than ‘‘a person’’) and it does not specify that the work to be performed must be within the United States. Furthermore, DHS proposes to add clarification that the bona fide job offer may include ‘‘telework, remote work, or other off-site work within the United States.’’ See proposed 8 CFR 214.2(h)(4)(ii). While USCIS currently allows these types of work arrangements (provided they are consistent with the certified LCA and other regulatory requirements), the regulations do not state this expressly. DHS believes this clarification is helpful as more businesses allow and more workers choose telework, remote work, or other types of work arrangements.133 DHS emphasizes that nothing in the proposed rule would change the Department of Labor’s administration and enforcement of statutory and regulatory requirements related to labor condition applications. See 8 U.S.C. 1182(n); 20 CFR part 655 Subparts H and I. These requirements would be unaffected by this proposed rule and would continue to apply to all H–1B employers. g. Legal Presence and Amenable to Service of Process In the second prong of the definition of U.S. employer at 8 CFR 214.2(h)(4)(iv)(D), DHS proposes to add a new requirement that the petitioner has a legal presence in the United States 133 See, e.g., Kim Parker, Juliana Menasce Horowitz, and Rachel Minkin, ‘‘COVID–19 Pandemic Continues to Reshape Work in America’’ (Feb. 16, 2022), https://www.pewresearch.org/ social-trends/2022/02/16/covid-19-pandemiccontinues-to-reshape-work-in-america/ (among those who have a workplace outside of their home, in January 2022, 61 percent said they choose not to go into their workplace, compared to only 31 percent of this population surveyed in October 2020); Greg Iacurci, ‘‘Why Labor Economists Say the Remote Work ‘Revolution’ is Here to Stay’’ (Dec. 1, 2022), https://www.cnbc.com/2022/12/01/whylabor-economists-say-the-remote-work-revolutionis-here-to-stay.html (the share of remote workers had been doubling every 15 years prior to 2020, but the subsequent increase during the pandemic amounted to 30 years of pre-pandemic growth). E:\FR\FM\23OCP3.SGM 23OCP3 Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules and is amenable to service of process in the United States. Legal presence, in this context, means that the petitioner is legally formed and authorized to conduct business in the United States. In order to employ an individual legitimately in a specialty occupation, an employer should be able to conduct business legally in the United States.134 If USCIS discovers at any time while the petition is pending that the petitioner does not have a legal presence in the United States, it may issue a request for additional evidence and provide the petitioner the opportunity to cure that deficiency. ‘‘Amenable to service of process’’ means that the petitioner may be sued in a court in the United States. Since the petitioner undertakes legal obligations to employ the beneficiary according to the terms and conditions on the petition and LCA, the petitioner should not be able to avoid liability for not complying with these obligations by later claiming that it is not the employer or is not amenable to service of process. The requirement that the petitioner is amenable to service of process in the United States is also found in other classifications, such as H–2B, O–1, and P–1. Those regulations state that ‘‘a foreign employer is any employer who is not amenable to service of process in the United States.’’ See 8 CFR 214.2(h)(6)(iii)(B); (o)(2)(i); and (p)(2)(i), respectively. lotter on DSK11XQN23PROD with PROPOSALS3 7. Beneficiary-Owners In the fourth prong of the definition of U.S. employer at 8 CFR 214.2(h)(4)(ii), DHS proposes to codify a petitioner’s ability to qualify as a U.S. employer even when the beneficiary possesses a controlling interest in that petitioner. As discussed above, historically, USCIS’s common law analysis of the employer-employee relationship has been an impediment for certain beneficiary-owned businesses to use the H–1B program. While USCIS has not applied the common law analysis of the employer-employee relationship since June 2020, when it rescinded its 2010 policy memorandum,135 DHS 134 See, e.g., In Re. 9019481, 2020 WL 9668720 (AAO July 17, 2020) (‘‘[T]he record of proceeding does not contain evidence demonstrating the Petitioner is active and in good standing with any State. If a petitioner is no longer in business, then no bona fide job offer exists to support the petition.’’); In Re. 16130730, 2021 WL 2806409 (AAO Apr. 27, 2021) (‘‘[T]he petitioner has not demonstrated that it is an entity in active and good standing. . . . If the petitioner is not actually in business, it cannot qualify as an entity with standing to file an H–1B petition.’’). 135 See USCIS, ‘‘Determining Employer-Employee Relationship for Adjudication of H–1B Petitions, Including Third-Party Site Placements,’’ HQ 70– 6.2.8, AD 10–24 (Jan. 8, 2010). VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 believes that prospective beneficiaryowned businesses may still be reluctant to participate in the H–1B program due to the legacy of its now-rescinded memorandum. Through this proposed change to 8 CFR 214.2(h)(4)(ii), DHS seeks to clarify its current policy and encourage more beneficiary-owned businesses to participate in the H–1B program.136 The United States has long been a destination for top talent from all over the world, including for entrepreneurs and innovators. The United States continues to build and expand initiatives to support its evolving workforce with policies such as the passage of the CHIPS and Science Act of 2022, which will foster innovation in many ways, including by reducing the barriers of entry to startups.137 While the United States prides itself on its ability to attract global talent, there are limited pathways for entrepreneurs to come to the United States under existing regulations. To promote access to H–1Bs for entrepreneurs, start-up entities, and other beneficiary-owned businesses, DHS is proposing to add provisions to specifically address situations where a potential H–1B beneficiary owns a controlling interest in the petitioning entity. If more entrepreneurs are able to obtain H–1B status to develop their business enterprises, the United States could benefit from the creation of jobs, new industries, and new opportunities.138 At the same time, DHS seeks to set reasonable conditions for when the beneficiary owns a controlling interest in the petitioning entity to better ensure program integrity. These proposed conditions would apply when 136 Again, DHS emphasizes that nothing in the proposed rule would change the Department of Labor’s administration and enforcement of statutory and regulatory requirements related to labor condition applications. See 8 U.S.C. 1182(n); 20 CFR part 655, subparts H and I. These requirements would be unaffected by this proposed rule and would continue to apply to all H–1B employers. 137 See The CHIPS and Science Act of 2022, Public Law 117–167 (Aug. 22, 2022). 138 See, e.g., National Bureau of Economic Research, ‘‘Winning the H–1B Visa Lottery Boosts the Fortunes of Startups’’ (Jan. 2020), https:// www.nber.org/digest/jan20/winning-h-1b-visalottery-boosts-fortunes-startups (‘‘The opportunity to hire specialized foreign workers gives startups a leg up over their competitors who do not obtain visas for desired employees. High-skilled foreign labor boosts a firm’s chance of obtaining venture capital funding, of successfully going public or being acquired, and of making innovative breakthroughs.’’); Pierre Azoulay, et al., ‘‘Immigration and Entrepreneurship in the United States’’ (National Bureau of Economic Research, Working Paper 27778 (Sept. 2020), https:// www.nber.org/system/files/working_papers/ w27778/w27778.pdf (‘‘immigrants act more as ‘job creators’ than ‘job takers’ and . . . non-U.S. born founders play outsized roles in U.S. high-growth entrepreneurship’’). PO 00000 Frm 00037 Fmt 4701 Sfmt 4702 72905 a beneficiary owns a controlling interest, meaning that the beneficiary owns more than 50 percent of the petitioner or when the beneficiary has majority voting rights in the petitioner. These proposed conditions would not apply when a beneficiary does not own a controlling interest in the petitioning entity. DHS believes it is reasonable to limit the application of these conditions to H–1B petitioners where the beneficiary has a controlling interest to ensure that the beneficiary will be employed in a specialty occupation in a bona fide job opportunity. One of the proposed conditions is that the beneficiary may perform duties that are directly related to owning and directing the petitioner’s business as long as the beneficiary will perform specialty occupation duties authorized under the petition a majority of the time. See proposed 8 CFR 214.2(h)(4)(ii). ‘‘A majority of the time’’ in this context means that the beneficiary must perform specialty occupation duties more than 50 percent of the time. By requiring that the beneficiary perform specialty occupation duties a majority of the time, the beneficiaryowner would have flexibility to perform non-specialty occupation duties that are directly related to owning and directing the petitioner’s business. This proposed rule would not preclude the beneficiary from being authorized for concurrent employment with two or more entities (including another entity where the beneficiary is also an owner with a controlling interest) so long as each entity has been approved to employ the beneficiary in a specialty occupation and the individual otherwise satisfies all eligibility requirements. In this concurrent employment scenario, where a beneficiary seeks concurrent employment with more than one entity and the beneficiary owns a controlling interest in each of the petitioners filing to authorize concurrent employment, the ‘‘majority of the time’’ standard must be met with respect to each petition, and the beneficiary must comply with the terms and conditions of each petition. The proposed language at 8 CFR 214.2(h)(4)(ii) would state that a beneficiary may perform non-specialty occupation duties as long as such nonspecialty occupation duties are directly related to owning and directing the petitioner’s business. Additionally and similar to other H–1B petitions, a beneficiary-owner may perform some incidental duties, such as making copies or answering the telephone. DHS expects a beneficiary-owner would need to perform some non-specialty E:\FR\FM\23OCP3.SGM 23OCP3 72906 Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules lotter on DSK11XQN23PROD with PROPOSALS3 occupation duties when growing a new business or managing the business. Notwithstanding incidental duties, nonspecialty occupation duties must be directly related to owning and directing the business. These duties may include, but are not limited to: signing leases, finding investors, and negotiating contracts. The goal is to ensure that a beneficiary who is the majority or sole owner and employee of a company would not be disqualified by virtue of having to perform duties directly related to owning and directing their own company, while also ensuring that the beneficiary would still be ‘‘coming temporarily to the United States to perform services . . . in a specialty occupation’’ as required by INA section 101(a)(15)(H)(i)(b). The proposed ‘‘majority of the time’’ framework would allow a beneficiaryowner to perform some non-specialty occupation duties that are directly related to owning and directing the business, as long as a majority of their time performing the job would be spent performing the specialty occupation duties authorized in the approved petition. USCIS would analyze all of the job duties—specialty occupation duties and non-specialty occupation duties— which the petitioner must accurately describe in the petition along with the expected percentage of time to be spent performing each job duty, to determine whether the job would be in a specialty occupation and to determine whether the non-specialty occupation duties are directly related to owning and directing the business. If the beneficiary would spend a majority of their time performing specialty occupation duties, and if the non-specialty occupation duties are directly related to owning and directing the business, then the position may qualify as a specialty occupation.139 The ‘‘majority of the time’’ analysis would be similar to the approach generally taken for other H–1B petitions, although it would be more limiting in order to mitigate against potential abuse.140 However, DHS acknowledges that past adjudicative practices have not 139 See GCCG Inc v. Holder, 999 F. Supp. 2d 1161, 1167 (N.D. Cal. 2013) (agreeing with Defendant that for USCIS to find the petitioner’s proffered job to be a specialty occupation, the majority of the beneficiary’s time must be spent performing the duties of the specialty occupation). 140 See, e.g., GCCG Inc v. Holder, 999 F. Supp. 2d 1161, 1165–68 (N.D. Cal. 2013) (finding the beneficiary to be mainly performing non-specialty occupation duties and explaining that USCIS requires the beneficiary’s duties to entail mainly the performance of specialty occupation duties for the position to qualify as a specialty occupation); Engaged in Life, LLC v. Johnson, No. 14–06112–CV– DW, 2015 WL 11111211, at *4 (W.D. Mo. Oct. 13, 2015) (citing GCCG Inc.). VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 been entirely consistent as to what level of non-specialty occupation duties is permissible and what level of such duties would result in a finding that the proffered position as a whole does not qualify as a specialty occupation.141 Codifying the ‘‘majority of the time’’ framework would provide clarity in the regulations as to what is permissible in the specific context of beneficiaryowners. This, in turn, would better ensure consistency in adjudications of petitions involving beneficiary-owners. DHS again emphasizes that nothing in the proposed rule would change the Department of Labor’s administration and enforcement of statutory and regulatory requirements related to labor condition applications, including requirements concerning the appropriate prevailing wage and wage level when the proffered position involves a combination of occupations.142 For example, in some cases the petition might involve a combination of occupations that can affect the petitioner’s wage obligation, as detailed in DOL’s wage guidance.143 Generally, when an H–1B employer requests a prevailing wage determination from DOL, the National Prevailing Wage Center will assign to 141 See, e.g., In Re. 8423340, 2020 WL 9668851, at *12 (AAO July 27, 2020) (‘‘[W]e will permit the performance of duties that are incidental to the primary duties of the proffered position as acceptable when they occur by chance, are intermittent, and are of a minor consequence. Anything beyond such incidental duties (e.g., predictable, recurring, and substantive job responsibilities), must be specialty occupation duties or the proffered position as a whole cannot be approved as a specialty occupation.’’); In Re. M– C-, 2016 WL 8316337, at *4 (AAO Dec. 23, 2016) (‘‘[A]nything beyond incidental duties, that is predictable, recurring, and substantive job responsibilities, must be specialty occupation duties or the proffered position as a whole cannot be approved as a specialty occupation.’’); In Re. 1280169, 2018 WL 2112902 (AAO Apr. 20, 2018) (concluding that the beneficiary’s position, on the whole, will include non-qualifying duties inconsistent with those of a specialty-occupation caliber position because the non-qualifying duties have not been shown to be incidental to the performance of the primary duties of the proffered position). 142 See 8 U.S.C. 1182(n); 20 CFR part 655, subparts H and I. 143 DOL, ‘‘Round 3: Implementation of the Revised Form ETA–9141 FAQs’’ at 1 (July 16, 2021), https://www.dol.gov/sites/dolgov/files/ETA/ oflc/pdfs/NPWC%20Round%203 %20Frequently%20Asked%20Questions%20%20Implementation%20of%20Revised%20Form %20ETA-9141.pdf (When there is a combination of occupations, the SOC code with the highest wage is assigned.); DOL, ‘‘Prevailing Wage Determination Policy Guidance Nonagricultural Immigration Programs Revised November 2009’’ at 4, https:// www.flcdatacenter.com/download/npwhc_ guidance_revised_11_2009.pdf (last visited Oct. 3, 2023) (If the employer’s job opportunity involves a combination of occupations, the National Prevailing Wage Center should list the relevant occupational code for the highest paying occupation.). PO 00000 Frm 00038 Fmt 4701 Sfmt 4702 the position the occupational code that has the higher of the prevailing wages amongst the combination of occupations. Under this proposed rule, a petitioner may be authorized to employ a beneficiary-owner in a combination of occupations, provided that the petitioner pays the required wage, consistent with existing DOL wage guidance, even when the beneficiary-owner is performing nonspecialty occupation duties as authorized by USCIS. DHS is also proposing to limit the validity period for beneficiary-owned entities. DHS proposes to limit the validity period for the initial petition and first extension (including an amended petition with a request for an extension of stay) of such a petition to 18 months each. See proposed 8 CFR 214.2(h)(9)(iii)(E). Any subsequent extension would not be limited and may be approved for up to 3 years, assuming the petition satisfies all other H–1B requirements. DHS proposes limiting the first two validity periods to 18 months as a safeguard against possible fraudulent petitions. While DHS sees a significant advantage in promoting the H–1B program to entrepreneurs, DHS believes that guardrails for beneficiaryowner petitions would be helpful to mitigate the potential for abuse of the H–1B program. Limiting the first two validity periods to 18 months each would allow DHS adjudicators to review beneficiary-owned petitions more frequently, and limiting the nature of non-specialty occupation duties that may be performed, would deter potential abuse and help to maintain the integrity of the H–1B program. DHS seeks public comments on these proposed safeguards and additional safeguards and flexibilities for beneficiary-owned businesses. 8. Site Visits Pursuant to its authority under INA sections 103(a), 214(a), 235(d)(3) and 287(b), 8 U.S.C. 1103(a), 1184(a), 1225(d)(3) and 1357(b), sections 402, 428 and 451(a)(3) of the HSA, 6 U.S.C. 202, 236 and 271(a)(3), and 8 CFR 2.1, USCIS conducts inspections, evaluations, verifications, and compliance reviews, to ensure that a petitioner and beneficiary are eligible for the benefit sought and that all laws have been complied with before and after approval of such benefits. These inspections, verifications, and other compliance reviews may be conducted telephonically or electronically, as well as through physical on-site inspections (site visits). The existing authority to conduct inspections, verifications, and other compliance reviews is vital to the E:\FR\FM\23OCP3.SGM 23OCP3 Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules lotter on DSK11XQN23PROD with PROPOSALS3 integrity of the immigration system as a whole and to the H–1B program specifically. In this rule, DHS is proposing to add regulations specific to the H–1B program to codify its existing authority and clarify the scope of inspections and the consequences of a petitioner’s or third party’s refusal or failure to fully cooperate with these inspections. See proposed 8 CFR 214.2(h)(4)(i)(B)(2). The authority of USCIS to conduct on-site inspections, verifications, or other compliance reviews to verify information does not relieve the petitioner of its burden of proof or responsibility to provide information in the petition (and evidence submitted in support of the petition) that is complete, true, and correct.144 In July 2009, USCIS started a compliance review program as an additional way to verify information in certain visa petitions.145 Under this program, USCIS Fraud Detection and National Security (FDNS) officers make unannounced site visits to collect information as part of a compliance review. A compliance review verifies whether petitioners and beneficiaries are following the immigration laws and regulations that are applicable in a particular case. This process includes researching information in government databases, reviewing public records and evidence accompanying the petition, and interviewing the petitioner and beneficiary.146 It also includes conducting site visits. The site visits conducted by USCIS through its compliance review program have uncovered a significant amount of noncompliance in the H–1B program. For instance, during FYs 2019–22, USCIS conducted a total of 27,062 H–1B compliance reviews and found 5,037 of them, equal to 18.6 percent, to be noncompliant or indicative of fraud.147 144 See 8 CFR 103.2(b). In evaluating the evidence, the truth is to be determined not by the quantity of evidence alone but by its quality. See Matter of Chawathe, 25 I&N Dec. 376 (quoting Matter of E–M-, 20 I&N Dec. 77, 80 (Comm’r 1989). 145 See USCIS, Administrative Site Visit and Verification Program, https://www.uscis.gov/aboutus/organization/directorates-and-program-offices/ fraud-detection-and-national-security-directorate/ administrative-site-visit-and-verification-program (last updated March 6, 2023). 146 Outside of the administrative compliance review program, USCIS conducts forms of compliance review in every case, including, for example, by researching information in relevant government databases or by reviewing public records and evidence accompanying the petition. 147 DHS, USCIS, PRD (2022). PRD196. USCIS conducted these site visits through its Administrative and Targeted Site Visit Program. A finding of noncompliance indicates that the petitioner and/or third-party company is not complying with the terms and conditions of the petition but does not indicate that the petitioner VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 These compliance reviews (during FYs 2019–22) consisted of reviews conducted under both the Administrative Site Visit and Verification Program, which began in 2009, and the Targeted Site Visit and Verification Program, which began in 2017. The targeted site visit program allows USCIS to focus resources where fraud and abuse of the H–1B program may be more likely to occur.148 The data from FYs 2013–19 include data only from the Administrative Site Visit and Verification Program.149 During FYs 2013–16, USCIS conducted 30,786 H–1B compliance reviews. Of those, 3,811 (12 percent) were found to be noncompliant.150 From FY 2016 through March 27, 2019, USCIS conducted 20,492 H–1B compliance reviews and found 2,341 (11.4 percent) to be noncompliant.151 Of the site visits conducted during FYs 2013–22, lack of cooperation may have contributed to a finding of noncompliance, although not all findings of noncompliance mean there was a lack of cooperation. Site visits are important to maintaining the integrity of the H–1B program and in detecting and deterring fraud and noncompliance with H–1B program requirements.152 Cooperation willfully misrepresented information provided to USCIS. An example of noncompliance may include a petitioner sending a worker to an end-client, who without the petitioner’s knowledge, uses the worker to perform duties substantially different from those specified in the petition. 148 See USCIS, ‘‘Putting American Workers First: USCIS Announces Further Measures to Detect H– 1B Visa Fraud and Abuse,’’ (Apr. 3, 2017), https:// www.uscis.gov/archive/putting-american-workersfirst-uscis-announces-further-measures-to-detect-h1b-visa-fraud-and-abuse. 149 See USCIS, ‘‘Administrative Site Visit and Verification Program,’’ https://www.uscis.gov/ about-us/directorates-and-program-offices/frauddetection-and-national-security/administrative-sitevisit-and-verification-program (last updated Mar. 6, 2023). 150 See USCIS, ‘‘Fiscal Year 2017 Report to Congress: H–1B and L–1A Compliance Review Site Visits, Fraud Detection and National Security Compliance Review Data (October 1, 2012, to September 30, 2016),’’ at 7 (Jan. 17, 2018), https:// www.dhs.gov/sites/default/files/publications/ USCIS%20-%20H-1B%20and%20L1A%20Compliance%20Review %20Site%20Visits.pdf (last visited Mar. 23, 2023). Note that USCIS conducted these site visits only through its Administrative Site Visit Program. 151 DHS, USCIS, PRD (2019). Summary of H–1B Site Visits Data. Note that USCIS conducted these site visits only through its Administrative Site Visit Program. 152 DHS acknowledges the 2017 Office of Inspector General report that addressed concerns with the H–1B site visit program and made recommendations for improvement. DHS, Office of Inspector General, ‘‘USCIS Needs a Better Approach to Verify H–1B Visa Participants,’’ OIG–18–03 (Oct. 20, 2017), https://www.oig.dhs.gov/sites/default/ files/assets/2017/OIG-18-03-Oct17.pdf. Since the issuance of this report, USCIS has greatly improved its site visit program pursuant to the report’s recommendations, such that USCIS believes the PO 00000 Frm 00039 Fmt 4701 Sfmt 4702 72907 is crucial to USCIS’s ability to verify information about employers and workers, and the overall conditions of employment. Therefore, as noted above, DHS is proposing additional regulations specific to the H–1B program to set forth the scope of on-site inspections and the consequences of a petitioner’s or third party’s refusal or failure to fully cooperate with these inspections. This proposed rule would provide a clear disincentive for petitioners that do not cooperate with compliance reviews and inspections while giving USCIS a greater ability to access and confirm information about employers and workers as well as identify fraud. The proposed regulations would make clear that inspections may include, but are not limited to, an on-site visit of the petitioning organization’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 USCIS may lawfully obtain and that it considers pertinent to verify facts related to the adjudication of the petition, such as facts relating to the petitioner’s and beneficiary’s eligibility and continued compliance with the requirements of the H–1B program. See proposed 8 CFR 214.2(h)(4)(i)(B)(2). The proposed regulation would also clarify that an inspection may take place at the petitioning organization’s headquarters, satellite locations, or the location where the beneficiary works or will work, including the beneficiary’s home, or third-party worksites, as applicable. The proposed provisions would make clear that an H–1B petitioner or any employer must allow access to all sites where the labor will be performed for the purpose of determining compliance with applicable H–1B requirements. The word ‘‘employer’’ used in this context would include petitioners and thirdparty contractors. DHS believes that the ability to inspect various locations is critical because the purpose of a site concerns addressed in the 2017 report no longer pertain. Specifically, the report’s assessment that ‘‘USCIS site visits provide minimal assurance that H–1B visa participants are compliant and not engaged in fraudulent activity’’ no longer pertains. As of March 31, 2019, the recommendations have been resolved. See DHS, Office of Inspector General, ‘‘DHS Open Unresolved Recommendations Over Six Months Old, as of March 31, 2019,’’ https://www.oig.dhs.gov/sites/default/files/DHSOpen-Recommendations-As-Of-033119_053019.pdf (not listing OIG–18–03 as an ‘‘open unresolved’’ report). DHS maintains that site visits, generally, are an important and effective tool for the H–1B program. The site visit provisions at proposed 8 CFR 214.2(h)(4)(i)(B)(2)(i) would directly support USCIS’s continued efforts to strengthen the effectiveness of the site visit program and the integrity of the H–1B program overall. E:\FR\FM\23OCP3.SGM 23OCP3 lotter on DSK11XQN23PROD with PROPOSALS3 72908 Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules inspection is to confirm information related to the petition, and any one of these locations may have information relevant to a given petition. If the petitioner and any third-party contractor does not allow USCIS officials to interview H–1B workers, including in the absence of the employer or the employer’s representatives, this may also result in denial or revocation of the associated H–1B petition(s). The interviews may take place on the employer’s property, or as feasible, at a neutral location agreed to by the interviewee and USCIS away from the employer’s property. The presence of employer representatives during such interviews can reasonably be expected to have a chilling effect on the ability of interviewed workers to speak freely and, in turn, impede the Government’s ability to ensure compliance with the terms and conditions of the H–1B program. The proposed regulation also states that if USCIS is unable to verify facts related to an H–1B petition, including due to the failure or refusal of the petitioner or third party to cooperate in an inspection or other compliance review, then the lack of verification of pertinent facts, including from failure or refusal to cooperate, may result in denial or revocation of the approval of any petition for workers who are or will be performing services at the location or locations that are a subject of inspection or compliance review, including any third-party worksites. See proposed 8 CFR 214.2(h)(4)(i)(B)(2). A determination that a petitioner or third party failed or refused to cooperate would be case specific, but it could include situations where one or more USCIS officers arrived at a petitioner’s worksite, made contact with the petitioner and properly identified themselves to a petitioner’s representative, and the petitioner refused to speak to the officers or refused entry into the premises or refused permission to review human resources (HR) records pertaining to the beneficiary. Failure or refusal to cooperate could also include situations where a petitioner or employer agreed to speak but did not provide the information requested within the time period specified, or did not respond to a written request for information within the time period specified. Before denying or revoking the petition, USCIS would provide the petitioner an opportunity to rebut adverse information and present information on its own behalf in compliance with 8 CFR 103.2(b)(16). This new provision would put petitioners on notice of the specific VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 consequences for noncompliance or lack of cooperation, whether by them or by a third party. It has long been established that, in H–1B visa petition proceedings, it is the petitioner’s burden to establish eligibility for the immigration benefit sought.153 If USCIS conducts a site visit to verify facts related to the H–1B petition or to verify that the beneficiary is or will be employed consistent with the terms of the petition approval, and is unable to verify relevant facts and otherwise confirm general compliance, then the petition could properly be denied or the approval revoked. This would be true whether the unverified facts related to a petitioner worksite or a third-party worksite at which a beneficiary had been or would be placed by the petitioner. It would also be true whether the failure or refusal to cooperate were by the petitioner or a third party. Petitioners could consider notifying third parties at whose worksites beneficiaries may be working about the possibility of DHS verification efforts regarding the immigration benefit. 9. Third-Party Placement (Codifying Defensor) In certain circumstances where an H– 1B worker provides services for a third party, USCIS would look to that third party’s requirements for the beneficiary’s position, rather than the petitioner’s stated requirements, in assessing whether the proffered position qualifies as a specialty occupation. As required by both INA section 214(i)(1) and 8 CFR 214.2(h)(4)(i)(A)(1), an H–1B petition for a specialty occupation worker must demonstrate that the worker will perform services in a specialty occupation that requires theoretical and practical application of a body of highly specialized knowledge and attainment of a baccalaureate or higher degree in the specific specialty (or its equivalent) as a minimum requirement for entry into the occupation in the United States. This proposal would ensure that petitioners are not circumventing specialty occupation requirements by imposing token requirements or requirements that are not normal to the third party. Specifically, under proposed 8 CFR 214.2(h)(4)(i)(B)(3), if the beneficiary will be staffed to a third party, meaning they will be contracted to fill a position 153 See INA section 291, 8 U.S.C. 1361; Matter of Simeio Solutions, 26 I&N Dec. 542, 549 (AAO 2015) (‘‘It is the petitioner’s burden to establish eligibility for the immigration benefit sought.’’); Matter of Skirball Cultural Center, 25 I&N Dec. 799, 806 (AAO 2012) (‘‘In visa petition proceedings, the burden of proving eligibility for the benefit sought remains entirely with the petitioner.’’). PO 00000 Frm 00040 Fmt 4701 Sfmt 4702 in a third party’s organization, the actual work to be performed by the beneficiary must be in a specialty occupation. Therefore, it is the requirements of that third party, and not the petitioner, that are most relevant when determining whether the position is a specialty occupation. If the beneficiary will work for a third party and perform work that is part of the third party’s regular operations, the actual work to be performed by the beneficiary must be in a specialty occupation based on the requirements for the position imposed by that third party. While a petitioning employer may be the entity that hires and pays the beneficiary, the actual services the beneficiary provides may be for a third party. When interpreting the meaning of ‘‘perform services . . . in a specialty occupation,’’ INA section 101(a)(15)(H)(i)(b), in the context of certain third-party placements, USCIS would look to the position requirements imposed by the third party if the beneficiary will be ‘‘staffed’’ to that third party. Under such an interpretation, a position would not qualify as a specialty occupation simply because the petitioning employer decides to require a baccalaureate or higher degree in a specific specialty.154 As stated in proposed 8 CFR 214.2(h)(4)(i)(B)(3), ‘‘staffed’’ means that the beneficiary ‘‘will be contracted to fill a position in a third party’s organization and becomes part of that third party’s organizational hierarchy by filling a position in that hierarchy (and not merely providing services to the third party.’’ There is a difference between a beneficiary who is ‘‘staffed’’ to a third party and a beneficiary who provides services to a third party (whether or not at a third-party location). A beneficiary who is ‘‘staffed’’ to a third party becomes part of that third party’s organizational hierarchy by filling a position in that hierarchy, even when the beneficiary technically remains an employee of the petitioner. In this circumstance where the beneficiary fills a position within the third party’s organizational hierarchy, the third party would be better 154 See Defensor v. Meissner, 201 F.3d 384, 388 (5th Cir. 2000) (‘‘If only [the employer]’s requirements could be considered, then any alien with a bachelor’s degree could be brought into the United States to perform a non-specialty occupation, so long as that person’s employment was arranged through an employment agency which required all clients to have bachelor’s degrees. Thus, aliens could obtain six year visas for any occupation, no matter how unskilled, through the subterfuge of an employment agency. This result is completely opposite the plain purpose of the statute and regulations, which is to limit [H–1B] visas to positions which require specialized experience and education to perform.’’). E:\FR\FM\23OCP3.SGM 23OCP3 Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules positioned than the petitioner to be knowledgeable of the actual degree requirements for the beneficiary’s work. Thus, it is reasonable for USCIS to consider the requirements of the third party as determinative of whether the position is a specialty occupation. See proposed 8 CFR 214.2(h)(4)(i)(B)(3). Compared to all cases where the H– 1B beneficiary provides services to a third party, a third party would not always be in a better position than the petitioner to set the requirements of the proffered position. For example, a beneficiary may provide software development services to a third party as part of the petitioner’s team of software developers on a discrete project, or a beneficiary employed by a large accounting firm may provide accounting services to various third-party clients. In these examples, proposed 8 CFR 214.2(h)(4)(i)(B)(3) would not apply, because it would not be reasonable to assume that the third party would be better positioned than the petitioner to know the actual degree requirements for the beneficiary’s work. DHS narrowed down the applicability of proposed 8 CFR 214.2(h)(4)(i)(B)(3) to only the subset of beneficiaries who would be ‘‘staffed’’ to a third party because these examples illustrate how a third party’s degree requirements would not always be as relevant as the petitioner’s degree requirements. Proposed 8 CFR 214.2(h)(4)(i)(B)(3) would be generally consistent with long-standing USCIS practice.155 In lotter on DSK11XQN23PROD with PROPOSALS3 155 See, e.g., In Re. ---, 2010 WL 3010500 (AAO Jan. 12, 2010) (‘‘In support of this analysis, USCIS routinely cites Defensor v. Meissner, 201 F.3d 384 (5th Cir. 2000), in which an examination of the ultimate employment of the beneficiary was deemed necessary to determine whether the position constitutes a specialty occupation.’’); In Re. 5037859, 2019 WL 6827396 (AAO Nov. 7, 2019) (‘‘The scenario in Defensor has repeatedly been recognized by Federal Courts as appropriate in determining which entity should provide the requirements of an H–1B position and the actual duties a beneficiary would perform.’’) (citing to Altimetrik Corp. v. USCIS, No. 2:18–cv–11754, at *7 (E.D. Mich. Aug. 21, 2019); Valorem Consulting Grp. v. USCIS, No. 13–1209–CV–W–ODS, at *6 VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 Defensor v. Meissner, 201 F.3d 384 (5th Cir. 2000), the court recognized that, if only the petitioner’s requirements are considered, then any beneficiary with a bachelor’s degree could be brought to the United States in H–1B status to perform non-specialty occupation work, as long as that person’s employment was arranged through an employment agency that required all staffed workers to have bachelor’s degrees. This result would be the opposite of the plain purpose of the statute and regulations, which is to limit H–1B visas to positions that require specialized education to perform the duties. If the work that the beneficiary would actually perform does not require the theoretical and practical application of a body of highly specialized knowledge and attainment of a baccalaureate or higher degree in a specific specialty or its equivalent, then the position would not qualify as an H– 1B specialty occupation. In such a case, the petitioning employer’s stated education and experience requirements for the beneficiary’s position would not be determinative to the specialty occupation assessment. USCIS would make the determination as to whether the beneficiary would be ‘‘staffed’’ to a third party on a case-by-case basis, taking into consideration the totality of the relevant circumstances. D. Request for Preliminary Public Input Related to Future Actions/Proposals 1. Use or Lose DHS wants to ensure that the limited number of H–1B cap-subject visas and new H–1B status grants available each fiscal year are used for non-speculative job opportunities. Demand for H–1B workers who would be subject to the annual numerical limitations, including those eligible under the advanced (W.D. Mo. Jan. 15, 2015); KPK Techs. v. Cuccinelli, No. 19–10342, at *10 (E.D. Mich. Sep. 16, 2019); Altimetrik Corp. v. Cissna, No. 18–10116, at *11 (E.D. Mich. Dec. 17, 2018); Sagarwala v. Cissna, No. CV 18–2860 (RC), 2019 WL 3084309, at *9 (D.D.C. July 15, 2019)). PO 00000 Frm 00041 Fmt 4701 Sfmt 4702 72909 degree exemption, has routinely exceeded the annual H–1B numerical allocations. DHS believes there is a problem of petitioners filing H–1B capsubject petitions even though there is no job opportunity available as of the requested start date. As illustrated by the data below, a significant percentage of H–1B beneficiaries do not enter the United States within six months of the requested employment start date or H– 1B petition approval date, whichever was later, or within 90 days of the visa validity start date. The data also show a large percentage of new or amended petitions received before the beneficiary’s arrival in the United States, suggesting that there may not have been a bona fide job opportunity available at the time of filing and the initial petition filed was simply to secure an H–1B cap number for the worker. Given the history of demand for H–1B visas that greatly exceeds supply, it is of great concern when a petitioner requests an H–1B cap number and receives approval, but does not use that approved H–1B petition to employ an H–1B worker when the petitioner claimed to need that worker to start and significantly delays such employment by six months or more. DHS has compiled internal data to help demonstrate the potential scale of the problem. The first two tables below focus on delayed entry into the United States by beneficiaries of H–1B capsubject petitions that selected consular processing. The third table looks at the same population of cases and amended or new petitions received prior to the beneficiary’s arrival in the United States. DHS believes that these may be indicators that the petitioners in these cases had speculative job opportunities at the time of filing their H–1B petitions. Table 9 shows data on H–1B capsubject petitions that selected consular processing into the United States and that DHS was able to match with the beneficiary’s arrival data into the United States. E:\FR\FM\23OCP3.SGM 23OCP3 72910 Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules Table 9: Arrivals After 6 Months from Requested Employment Start Date or H-lB Petition Approval FY Date, Whichever Is Later (Percent) 2017 48.4% 2018 41.9% 2019 38.4% 2020 38.7% 2022 YTD 41.1% AVERAGE 42.8% Source: C3, Sept. 15, 2022. ADIS, Aug. 13, 2022. Data in FY 2022 YTD only through source pull-date. Note(s): ADIS matching completed using first name, last name, and date of birth. Associated Receipts are receipts requesting selection A, B, C, or Fin Part 2Q2 ofl129. This table shows that, from FYs 2017 through 2022 (excepting FY 2021),156 on average, approximately 43 percent of H– 1B cap-subject beneficiaries of petitions that selected consular processing (and that DHS was able to match with the beneficiaries’ arrival data) did not enter the United States in H–1B status within six months of the requested employment start date on the H–1B petition or the H–1B petition approval date, whichever was later.157 While it is reasonable to conclude that some of these delays were due to legitimate reasons (e.g., long consular wait times), other delays may have been due to illegitimate reasons (e.g., the petitioner filing an H–1B petition despite not having work available on the requested start date). While DHS is aware that these data are imperfect, in part because DHS was not able to match some petitions with beneficiary arrival data, these data illustrate the scale of the issue—that nearly half of beneficiaries who consular processed appear to have not entered the United States in H–1B status within six months of the requested start date. DHS is aware that there have been significant visa delays at some consulates, especially during the last few years. Table 10 takes this into account by showing data on H–1B beneficiaries who went through consular processing, who arrived more than 90 days after their DOS visa validity start date, and for whom DHS was able to match with arrival data into the United States with corresponding H–1B petitions. 156 FY 2021 data was not included because of the variances in visa entries and closed borders due to the COVID–19 pandemic. 157 These data only track whether a beneficiary entered the United States in H–1B status after 6 months of the employment start date or H–1B petition approval date, whichever was later; the data do not track a beneficiary’s prior or subsequent travel history into or outside of the United States. By capturing data on entries made after the requested employment start date on the H–1B petition or the H–1B petition approval date, whichever was later, these data should exclude entries that were made after 6 months of the requested employment start date because of a delay in USCIS approving the H–1B petition. VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 PO 00000 Frm 00042 Fmt 4701 Sfmt 4702 E:\FR\FM\23OCP3.SGM 23OCP3 EP23OC23.015</GPH> lotter on DSK11XQN23PROD with PROPOSALS3 Average times are calculated only for records with a matching ADIS arrival. ADIS matching completed on ADIS H-lB records onlv. Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules 72911 Table 10: Arrivals After 90 Days of DOS Visa Validity Start (Percent) 38.8% 27.0% 16.1% 22.4% 21.2% FY 2017 2018 2019 2020 2022 YTD TOTAL AVERAGE 26.6% Source: C3, Sept. 15, 2022. ADIS, Aug. 13, 2022. Data in FY 2022 YTD only through source pull-date. Note(s): ADIS matching completed using first name, last name, and date of birth. Associated Receipts are receipts requesting selection A, B, C, or Fin Part 2Q2 of 1-129. This table shows that, from FYs 2017 through 2022 (excepting FY 2021),158 on average, more than 26 percent of H–1B cap-subject beneficiaries who selected consular processing arrived in the United States more than 90 days after the DOS visa validity start date. Again, while it is reasonable to conclude that some of these delays were due to legitimate reasons (e.g., a medical emergency pertaining to the beneficiary or the beneficiary’s immediate family), other delays may have been due to illegitimate reasons (e.g., the petitioner filing an H–1B petition despite not having work available on the requested start date). DHS has also compiled internal data on the number of amended or new petitions received prior to the beneficiary’s arrival in the United States, which may also be an indicator that a petitioner had a speculative job opportunity at the time of filing. Table 11 shows data on the percentage of amended or new petitions received prior to the beneficiary’s arrival in the United States that DHS was able to match with the beneficiary’s arrival data into the United States. 158 FY 2021 data was not included because of the variances in visa entries and closed borders due to the COVID–19 pandemic. 159 Part 2, question 2, asks for the ‘‘Basis for Classification,’’ and option ‘‘a’’ is for ‘‘New employment.’’ 160 Part 2, question 2, asks for the ‘‘Basis for Classification,’’ and option ‘‘b’’ is for ‘‘Continuation of previously approved employment without change with the same employer.’’ 161 Part 2, question 2, asks for the ‘‘Basis for Classification,’’ and option ‘‘c’’ is for ‘‘Change in previously approved employment.’’ 162 Part 2, question 2, asks for the ‘‘Basis for Classification,’’ and option ‘‘f’’ is for ‘‘Amended petition.’’ VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 PO 00000 Frm 00043 Fmt 4701 Sfmt 4702 E:\FR\FM\23OCP3.SGM 23OCP3 EP23OC23.016</GPH> lotter on DSK11XQN23PROD with PROPOSALS3 Average times are calculated only for records with a matching ADIS arrival. ADIS matching completed on ADIS H-lB records only. 72912 Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules Table 11: Associated Petitions Received Prior to Arrival FY 2017 2018 2019 2020 2022 YTD Total Average Percent of Associated Petitions Received Prior to Arrival (Consular Processing Onlv) 24.2% 14.5% 9.6% 15.3% 2.3% Percent of Associated Receipts are receipts requesting selection A in Part 2Q2 of I129.159 14.9% Percent of Associated Receipts are receipts requesting selection Bin Part 2Q2 of I129.160 Percent of Associated Receipts are receipts requesting selection C in Part 2Q2 ofl129.161 Percent of Associated Receipts are receipts requesting selection F in Part 2Q2 of I129.162 2.0% 1.8% 2.3% 6.1% 0.9% 0.6% 0.6% 0.9% 1.4% 0.0% 1.2% 1.2% 1.8% 2.3% 0.2% 20.4% 11.0% 4.6% 5.4% 1.2% 2.6% 0.7% 1.4% 10.2% Table 11 shows that from FYs 2017 through 2022 (excepting FY 2021),163 an average of approximately 15 percent of amended or new petitions where the beneficiary selected consular processing are received prior to the beneficiary’s arrival in the United States. Again, while it is reasonable to conclude that some of these amended or new petitions were due to legitimate reasons (e.g., a legitimate shift in work location or endclient project), other petitions may have been filed due to illegitimate reasons (e.g., the petitioner filing an H–1B petition despite not having work available on the requested start date). DHS believes that these data illustrate that there may be a problem with petitioners filing H–1B petitions and taking up cap numbers without having non-speculative job opportunities as of the requested start date on the petition. DHS is looking for the most effective ways to prevent petitioners from receiving approval for speculative H–1B employment, and to curtail the practice of delaying H–1B cap-subject beneficiary’s employment in the United States until a bona fide job opportunity materializes. DHS has considered various approaches—two of which are 163 FY 2021 data was not included because of the variances in visa entries and closed borders due to the COVID–19 pandemic. VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 discussed below but has determined that each of them has potentially significant downsides. For example, although current 8 CFR 214.2(h)(8)(ii)(B) requires petitioners to notify USCIS if a petition goes unused because the beneficiary does not apply for admission to the United States, so that the agency may revoke approval of the petition, this regulatory provision does not include a deadline for admission or a reporting deadline. Thus, one approach DHS considered would be to amend 8 CFR 214.2(h)(8)(ii)(B) to require petitioners to notify USCIS if a beneficiary does not apply for admission after a certain amount of time, so that USCIS may revoke the approval of the petition. DHS could add a reporting requirement, so that a failure to report, or reporting that the beneficiary had not yet been admitted within the required timeframe, could be a basis for revocation. This proposal would also afford petitioners an opportunity to provide legitimate reasons for the delay in admission and avoid revocation. However, this approach would not prevent a petitioner without a legitimate reason for the delay from circumventing the intent of this provision, such as by filing an amended petition for the cap-subject beneficiary and further delaying their admission, or having the beneficiary enter the United PO 00000 Frm 00044 Fmt 4701 Sfmt 4702 States one day before the deadline and then leaving shortly thereafter. In addition, while the revocation of the H– 1B petition may serve as a disincentive to the petitioner and discourage such conduct the next time around, it may not be the most efficient way to deter the filing of the H–1B petition itself given the time that would have elapsed between the time of filing and the final revocation. Another approach DHS considered would be to create a rebuttable presumption that a petitioner had only a speculative position available for the beneficiary of an approved H–1B capsubject petition, which would be triggered if certain circumstances occurred. These circumstances might include delayed entry or filing an amended petition before the beneficiary would have been admitted to the United States in H–1B status. If the petitioner were unable to rebut this presumption, USCIS could deny any extension request based on the previously approved cap-subject H–1B cap-subject petition and could revoke the initial petition approval. Regarding delayed entry, DHS considered proposing that the rebuttable presumption would be triggered if the beneficiary had not entered the United States in H–1B status either within a certain number of days of the requested start date or within a E:\FR\FM\23OCP3.SGM 23OCP3 EP23OC23.017</GPH> lotter on DSK11XQN23PROD with PROPOSALS3 Source: C3, Sept. 15, 2022. ADIS, Aug. 13, 2022. Data in FY 2022 YTD only through source pull-date. Note(s): ADIS matching completed using first name, last name, and date of birth. Associated Receipts are receipts requesting selection A, B, C, or Fin Part 2Q2 ofl-129. Average times are calculated only for records with a matching ADIS arrival. ADIS matching completed on ADIS H-lB records onlv. lotter on DSK11XQN23PROD with PROPOSALS3 Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules certain number of days of the validity date of their H–1B nonimmigrant visa based on the cap-subject petition. Ultimately, DHS concluded that this approach of a rebuttable presumption would create significant evidentiary burdens for legitimate petitioners. Further, while it would bolster program integrity, similar to the first approach, it would not be an efficient deterrent given the time that would have elapsed between the time of filing and the denial of the extension request or the final revocation. As discussed, DHS is aware that either option could have a broad reach and potentially include petitions for beneficiaries whose admission into the United States was delayed for legitimate reasons beyond their control, such as lengthy consular processing times. Either option would place an additional burden on petitioners, which may be particularly difficult to overcome for a subsequent petitioner that is distinct from the original petitioner that filed the initial H–1B cap-subject petition. Further, the above options would focus on the beneficiary’s timely admission into the United States but would not account for the beneficiary’s or petitioner’s subsequent actions. Therefore, because DHS believes there is a problem of petitioners filing H–1B cap-subject petitions for speculative job opportunities that would not be fully resolved by the changes at proposed 8 CFR 214.2(h)(4)(iii)(F), DHS is seeking preliminary public comments on the approaches described above, as well as soliciting ideas that would further curb or eliminate the possibility that petitioners may have speculative job opportunities at the time of filing or approval of H–1B petitions and delay admission of H–1B beneficiaries until they have secured work for them. DHS is hoping to use the public input it receives to develop proposals that would further strengthen the programmatic framework and complement provisions already proposed in this NPRM, such as the proposed requirement that the petitioner establish a non-speculative position for the beneficiary as of the start date of the validity period under proposed 8 CFR 214.2(h)(4)(iii)(F) and the proposed requirement that a petitioner have a bona fide job offer under proposed 8 CFR 214.2(h)(4)(ii). Specifically, DHS is requesting ideas and, where possible, supporting data for future regulatory, subregulatory, and enforcement actions that USCIS could take, alone or in partnership with other agencies, to mitigate this behavior. With respect to the two approaches discussed above, DHS encourages commenters to VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 provide input on how a time restriction on admission, or a rebuttable presumption as described above, could impact legitimate business practices. DHS also encourages commenters to provide ideas on other ways DHS could better ensure petitions are filed only for non-speculative job opportunities without imposing an unnecessary burden on H–1B cap-subject petitioners. 2. Beneficiary Notification DHS is seeking preliminary public input on ways to provide H–1B and other Form I–129 beneficiaries with notice of USCIS actions taken on petitions filed on their behalf, including receipt notices for a petition to extend, amend, or change status filed on their behalf. USCIS does not currently provide notices directly to Form I–129 beneficiaries. DHS is aware that the lack of petition information may leave Form I–129 beneficiaries unable to verify their own immigration status and susceptible to employer abuse.164 DHS is also aware that having case status information would improve worker mobility and protections. DHS is committed to addressing the issue of beneficiary notification but is not at this time proposing a specific beneficiary notification process or regulation. The agency continues to research and consider the feasibility, benefits, and costs of various options separate and apart from this proposed rule. At this time, DHS would like to solicit preliminary public comments on various options, and in particular, one option currently being considered for potential future action separate from this rulemaking. This option would require Form I–129 petitioners to provide a copy of the notice of USCIS action to beneficiaries in the United States seeking extension or change of status. DHS believes such notification may be especially beneficial in the context of extensions or changes of status. While beneficiaries who are outside of the United States will receive basic petition information on Form I–94, Arrival-Departure Record, and on their nonimmigrant visa, beneficiaries who 164 See DHS, Office of the Citizenship and Immigration Services Ombudsman, Recommendation to Remove a Barrier Pursuant to Executive Order 14012: Improving U.S. Citizenship and Immigration Services’ Form I–129 Notification Procedures Recommendation Number 62 (Mar. 31, 2022), https://www.dhs.gov/sites/default/files/202203/CIS%20OMBUDSMAN_I-129_BENEFICIARY_ RECOMMENDATION_fnl_03-2022_508.pdf (‘‘lack of direct notification may leave them without status documentation, rendering them noncompliant with the law, susceptible to abuse by employers, and unable to access benefits requiring proof of status’’). This report formally recommended that USCIS directly notify beneficiaries of Form I–129 actions taken in the petition on their behalf. PO 00000 Frm 00045 Fmt 4701 Sfmt 4702 72913 are already in the United States must rely entirely on petitioners and employers to provide such information.165 DHS recognizes this option would leave open the possibility that petitioners would not comply with this requirement, something DHS intends to forestall, but believes it would still provide benefits and worker protections while USCIS continues to explore other options, including the feasibility of technological solutions that would allow USCIS to directly notify beneficiaries or allow beneficiaries to directly access case status.166 DHS is particularly interested in comments that cite evidence of the expected costs and burdens on petitioners as a result of such a requirement, as well as comments and evidence about the extent that such a provision would benefit H–1B workers, which DHS will take into consideration when crafting potential future solutions or regulatory proposals. E. Potential Publication of One or More Final Rules As indicated earlier in this preamble, after carefully considering public comments it receives on this NPRM, DHS may publish one or more final rules to codify the provisions proposed in this NPRM. F. Severability DHS intends for the provisions of this proposed rule, if finalized through one or more final rules, to be severable from each other such that if a court were to hold that any provision is invalid or unenforceable as to a particular person or circumstance, the rule would remain in effect as to any other person or circumstance. While the various provisions of this proposed rule, taken together, would provide maximum benefit with respect to modernizing the H–1B program and strengthening program integrity, none of the provisions are interdependent and unable to operate separately, nor is any single provision essential to the rule’s overall workability. DHS welcomes public input on the severability of provisions contained in this proposed rule. 165 The Form I–797 approval notice instructs petitioners that the lower portion of the notice, including Form I–94, ‘‘should be given to the beneficiary(ies).’’ 166 See USCIS Memorandum, Response to Recommendations on Improving Form I-129 Notification Procedures (Aug. 11, 2022), https:// www.dhs.gov/sites/default/files/2022-08/ SIGNED%20USCIS%20Response%20to %20Formal%20Recommendation%20%20Form%20I-129.08122022_v2.pdf. E:\FR\FM\23OCP3.SGM 23OCP3 72914 Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules V. Statutory and Regulatory Requirements lotter on DSK11XQN23PROD with PROPOSALS3 A. Executive Order 12866 (Regulatory Planning and Review) and Executive Order 13563 (Improving Regulation and Regulatory Review) Executive Orders (E.O.) 12866 (Regulatory Planning and Review), as amended by Executive Order 14094 (Modernizing Regulatory Review), and 13563 (Improving Regulation and Regulatory Review) direct agencies to assess the costs and benefits of available regulatory alternatives and, if a regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. The Office of Management and Budget (OMB) has designated this proposed rule a ‘‘significant regulatory action’’ as defined under section 3(f) of E.O. 12866, as amended by Executive Order 14094, but it is not significant under section 3(f)(1) because its annual effects on the economy do not exceed $200 million in any year of the analysis. Accordingly, OMB has reviewed this proposed rule. 1. Summary As discussed in the preamble, the purpose of this rulemaking is to modernize and improve the regulations PO 00000 Frm 00046 Fmt 4701 Sfmt 4702 governing the H–1B program by: (1) modernizing and streamlining H–1B program requirements and improving program efficiency; (2) providing greater benefits and flexibilities for petitioners and beneficiaries; and (3) improving integrity measures. For the 10-year period of analysis of the proposed rule DHS estimates the annualized net costs of this rulemaking will be $6,339,779 annualized at 3 percent and 7 percent. Table 12 provides a more detailed summary of the proposed rule provisions and their impacts. BILLING CODE 9111–97–P E:\FR\FM\23OCP3.SGM 23OCP3 Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules Table 12. Summarv of Provisions and Imoacts of the Prooosed Rule Estimated Description of Proposed Proposed Rule Provisions Costs/Transfers of Change to Provisions Provisions □ DHS proposes to Quantitative: 1. Amended Petitions clarify when an Petitioners amended or new H- lB □ None petition must be filed due to a change in an DHS/USCISH- lB worker's place of employment. □ None 2. Deference □ DHS proposes to codify and clarify its existing deference policy. Quantitative: Petitioners □ DHS estimates the total annual cost savings to petitioners would be $297,673. DHS/USCIS □ None DHS/USCIS□ None Qualitative: Petitioners DHS/USCIS□ None DHS/USCIS□ None Qualitative: Petitioners □ None DHS/USCIS□ None Quantitative: Petitioners □ DHS estimates the total annual cost savings to petitioners would be $338,412 based on the pre policy baseline. DHS/USCIS □ None Qualitative: Petitioners □ DHS anticipates that codifying its existing deference policy would save petitioners time from having to answer RFEs, and provide more certainty when businesses are planning for their HR needs. DHS/USCIS□ DHS may issue and review fewer RFEs, which may save adjudicators time. VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 PO 00000 Frm 00047 Fmt 4701 Sfmt 4725 E:\FR\FM\23OCP3.SGM 23OCP3 EP23OC23.018</GPH> lotter on DSK11XQN23PROD with PROPOSALS3 Estimated Benefits of Provisions Qualitative: Petitioners □ None Quantitative: Petitioners □ None 72915 72916 3. Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules Evidence of Maintenance of Status □ DHS proposes to clarify that evidence of maintenance of status is required for petitions where there is a request to extend or amend the beneficiary's stay. Quantitative: Petitioners □ None Quantitative: Petitioners □ None DHS/USCIS□ None DHS/USCIS □ None Qualitative: Petitioners □ None Qualitative: Petitioners □ DHS anticipates that codifying and providing clarification of the requirements for maintenance of status applications would at least render some RFEs andNOIDs unnecessary; therefore, may save the petitioner's time. DHS/USCIS□ None DHS/USCIS□ This would in tum reduce the added burden on adjudicators associated with receiving, responding to, and adjudicating RFEs and NOIDs, and decrease the number of RFEs and NOIDs Eliminating the Itinerary Requirement for H Programs □ DHS proposes to eliminate the H programs' itinerary requirement. Quantitative: Petitioners □ None DHS/USCIS□ None Qualitative: Petitioners □ None lotter on DSK11XQN23PROD with PROPOSALS3 DHS/USCIS□ None VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 PO 00000 Frm 00048 Fmt 4701 Sfmt 4725 Quantitative: Petitioners □ DHS estimates the total annual cost savings to petitioners would be $708,300. E:\FR\FM\23OCP3.SGM DHS/USCIS □ None Qualitative: Petitioners □ This may benefit petitioners who have beneficiaries at 23OCP3 EP23OC23.019</GPH> 4. Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules 72917 alternative worksites and agents. DHS/USCIS□ None 5. Validity Expires Before Adjudication □ DHS proposes to allow H-lB petitions to be approved or have their requested validity period dates extended ifUSCIS adjudicates and deems the petition approvable after the initially requested validity period enddate, or the period for which eligibility has been established, has passed. This typically would happen if USCIS deemed the petition approvable upon a favorable motion to reopen, motion to reconsider, or appeal. Quantitative: Petitioners □ None Quantitative: Petitioners □ None DHS/USCIS □ None DHS/USCIS □ None Qualitative: Petitioners □ Increased cost of receiving an RFE and spending time to review it. USCIS may issue an RFE asking whether the petitioner wants to update the dates of intended employment. This change may increase the number ofRFE's; however, it may save petitioners from having to file another H- lB petition and USCIS from having to intake and adjudicate another petition. □ Reduced cost of filing new petition. Qualitative: Petitioners □ This proposed change may save the petitioners the opportunity cost of time and the fee to file an additional form. DHS/USCIS□ None □ 6. H- lB Cap Exemptions lotter on DSK11XQN23PROD with PROPOSALS3 □ VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 DHS proposes to revise the requirements to qualify for H- lB cap exemption when a beneficiary is not directly employed by a qualifying institution, organization, or entity. DHS also proposes to revise the definition of "nonprofit research organization" and PO 00000 Frm 00049 Fmt 4701 Quantitative: Petitioners □ None Quantitative: Petitioners □ None DHS/USCIS □ None DHS/USCIS □ None Qualitative: Petitioners □ Some petitioners may see a transfer of $10 Qualitative: Petitioners □ These petitioners may benefrtbecausethey Sfmt 4725 E:\FR\FM\23OCP3.SGM 23OCP3 EP23OC23.020</GPH> DHS/USCIS□ None 72918 Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules "governmental research organization." from no longer registering. Additional cost savings on ACWIAfees associated with initial cap-subject petitions are possible. DHS/USCIS□ DHS will likely receive fewer registrations for H-lB cap-subject petitioners; therefore, will likely receive less fees for H1B registrations. □ 7. Under current regulations, the automatic cap-gap extension is valid only until October 1 of the fiscal year for which H- lB status is being requested. DHS/USCIS□ None Quantitative: Petitioners □ None Quantitative: Petitioners □ None DHS/USCIS □ None DHS/USCIS □ None Qualitative: Students□ None Qualitative: Petitioners □ This change may benefit petitioners and students, as the automatic extension end date from October 1 to April 1 of the relevant fiscal year would avoid disruptions in employment authorization that some F-1 nonimmigrants seeking cap-gap extensions have experienced over the past several years. DHS/USCIS□ None Automatic Extension of Authorized Employment "Cap-Gap" □ may no longer have to submit a registration for a cap-subject petition and potentially have greater access to high skilled talent. Increase in population of petitioners eligible for cap exemption. DHS/USCIS□ None Start Date Flexibility for Certain Cap-Subject H- lB Petitions VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 □ DHS proposes to eliminate all the text currently at 8 CFR 2 l 4.2(h)(8)(iii)(A)(4), PO 00000 Frm 00050 Fmt 4701 Quantitative: Petitioners □ None Sfmt 4725 E:\FR\FM\23OCP3.SGM Quantitative: Petitioners □ None 23OCP3 EP23OC23.021</GPH> lotter on DSK11XQN23PROD with PROPOSALS3 8. Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules which relates to a limitation on the requested start date. DHS/USCIS n None 72919 DHS/USCTS □ None Qualitative: Petitioners □ This proposed change is also a potential cost savings to petitioners who, in the event USCIS cap-subject petitions that were rejected solely due to start date, would no longer need to resubmit their petition(s). Qualitative: Petitioners □ Reduced confusion regarding which start date they must put on an H-lB petition. DHS/USCIS□ None DHS/USCIS□ None 9. Additional Time Burden for the H-lB Registration System □ lotter on DSK11XQN23PROD with PROPOSALS3 10. Beneficiary Centric Selection VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 Due to changes in the instructions, adding clarifying language regarding the denial or revocation of approved H-lB petitions, adding information collection elements related to the beneficiary-centric registration selection option, namely the collection of passport information and related instructional language, and adding verification before submitting instructions, this proposed rule would increase the burden per response by 5 minutes. Under the new proposal, each unique individual who has a registration submitted on their behalf would be entered into the selection process once, regardless of the number of registrations filed on their behalf. By selecting by a unique beneficiary, DHS would better PO 00000 Frm 00051 Fmt 4701 Quantitative: Petitioners □ DHS estimates that the additional time to complete and submit the H-lB registration would cost $3,001,285 ammally. Quantitative: Petitioners □ None DHS/USCIS □ None Qualitative: Petitioners □ None DHS/USCIS □ None DHS/USCIS□ None Qualitative: Petitioners □ None DHS/USCIS□ None Quantitative: Petitioners □ DHS estimates the total annual cost savings to petitioners would be $3,840,822 for the registrants cost of time. □ DHS estimates that there will be 73,501 fewer registrations due to this change, resulting in a $735,010 Sfmt 4725 E:\FR\FM\23OCP3.SGM Quantitative: Petitioners □ None DHS/USCIS □ None Qualitative: Petitioners/Beneficiaries □ DHS believes that changing how USCIS 23OCP3 EP23OC23.022</GPH> □ 72920 Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules ensure that each individual has the same chance of being selected, regardless of how many registrations were submitted on their behalf. cost savings to petitioners based on those petitioners no longer needing to pay the $10 registration fee. conducts the selection process to select by unique beneficiaries instead of registrations would give each unique beneficiary an equal chance at selection and would reduce the advantage that beneficiaries with multiple registrations submitted on their behalf have over beneficiaries with a single registration submitted on their behalf. DHS/USCIS□ None Qualitative: Petitioners □ None DHS/USCIS□ None DHS/USCIS□ None J 11. Bar on Multiple Registrations Submitted by Related Entities DHS is proposing to preclude the submission of multiple H-lB cap-subject registrations by related entities for the same beneficiary unless the related registrants can establish a legitimate business need for submitting multiple cap-subject registrations for the same beneficiary. Quantitative: Petitioners □ None DHS/USCIS□ None Qualitative: Petitioners □ None DHS/USCIS□ None Quantitative: Petitioners □ None DHS/USCIS □ None Qualitative: Petitioners □ This would benefit the petitioners during the years that the registration process is suspended, and the beneficiary centric process would not be in place to support the petitioners. lotter on DSK11XQN23PROD with PROPOSALS3 12. Registrations with False Information or that are Otherwise Invalid VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 J DHS proposes to codify its authority to deny or revoke a petition on the basis that the statement of facts on the underlying registration was not PO 00000 Frm 00052 Fmt 4701 Quantitative: Petitioners □ None Quantitative: Petitioners □ None DHS/USCIS□ None DHS/USCIS □ None Sfmt 4725 E:\FR\FM\23OCP3.SGM 23OCP3 EP23OC23.023</GPH> DHS/USCIS□ This would also lead to improved program integrity for USCIS. Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules true and correct, or was inaccurate, fraudulent, or misrepresented a material fact. Qualitative: Petitioners □ DHS anticipates that USCIS adjudicators may issue more RFEs and NOIDs related to registrations with false informationunderthis proposed rule, which would increase the burden on petitioners and adjudicators. □ USCIS may deny or revoke the approval of any petition filed for the beneficiary based on those registrations with false information. 72921 Qualitative: Petitioners □ None DHS/USCIS□ This would lead to improved program integrity for USCIS. DHS/USCIS□ DHS would need to spend time issuing RFEs and NOIDs with false information 13. Provisions to Ensure Bona Fide Job Offer for a Specialty Occupation Position □ DHS proposes to codify USCIS' authority to request contracts, work orders, or similar evidence. Quantitative: Petitioners □ None Quantitative: Petitioners □ None DHS/USCIS□ None DHS/USCIS □ None Qualitative: Petitioners □ No Action Baseline: None Qualitative: Petitioners □ No Action Baseline: There maybe transparency benefits due to this proposed change. Pre-Policy Baseline: Petitioners may have taken time to find contracts or legal agreements, if available, or other evidence including technical documentation, milestone tables, or statements of work. □ Pre-Policy Baseline: None DHS/USCIS□ None DHS/USCIS□ None VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 PO 00000 Frm 00053 Fmt 4701 Sfmt 4725 E:\FR\FM\23OCP3.SGM 23OCP3 EP23OC23.024</GPH> lotter on DSK11XQN23PROD with PROPOSALS3 □ 72922 Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules □ DHS proposes to codify a petitioner's ability to qualify as a U.S. employer even when the beneficiary possesses a controlling interest in that petitioner. Quantitative: Petitioners □ None Quantitative: Petitioners □ None DHS/USCIS□ None DHS/USCIS □ None Qualitative: Petitioners □ None Qualitative: Petitioners □ This proposed change may benefit H-lB petitions for entrepreneurs, start-up entities, and other beneficiary-owned businesses. DHS/USCIS□ None lotter on DSK11XQN23PROD with PROPOSALS3 15. Site Visits VerDate Sep<11>2014 19:04 Oct 20, 2023 □ Jkt 262001 DHS is proposing to add regulations specific to the H -lB program to codify its existing authority to conduct site visits and clarify the scope of inspections and the consequences of a petitioner's or third party's refusal or failure to fully cooperate with these inspections. PO 00000 Frm 00054 Fmt 4701 Quantitative: Petitioners □ Failure to cooperate during site visits or other compliance reviews may result in denial or revocation of any petition for workers performing services at the location or locations that are a subject of inspection or compliance review. Such action, in turn, may result in opportunity costs of time to provide information to USCIS during these compliance reviews and inspections. On average, USCIS site visits last 1. 08 hours, which is a reasonable estimate for the marginal time that a petitioner may need to spend in order to comply with a site visit. □ Employers that do not cooperate would face denial or revocation of their petition(s), which could result in costs to those businesses. Sfmt 4725 E:\FR\FM\23OCP3.SGM DHS/USCIS□ None Quantitative: Petitioners □ None DHS/USCIS □ None Qualitative: Petitioners □ None DHS/USCIS□ A benefit is that USCIS would have clearer authority to deny or revoke a petition if unable to verify information related to the petition. □ Existing USCIS enforcement activities would be more effective by additional cooperation from employers. 23OCP3 EP23OC23.025</GPH> 14. Beneficiary-Owners Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules □ 72923 DHS obtains the total annual cost of the H1B worksite inspections to be $674,881 for the proposed rule. DHS/USCIS□ None Qualitative: Petitioners □ None DHS/USCIS□ None 16. Third-party placement (Codifying Defensor) □ In this proposed provision, when the beneficiary will be staffed to a third party, USCIS would look at the third party's requirements for the beneficiary's position, rather than the petitioner's stated requirements, in assessing whether the proffered position qualifies as a specialty occupation. Quantitative: Petitioners □ None Quantitative: Petitioners □ None DHS/USCIS□ None DHS/USCIS □ None Qualitative: Petitioners - Qualitative: Petitioners - □ No Action Baseline: □ None □ Pre-Policy Baseline: Petitioners may have taken time to demonstrate that the worker will perform services in a specialty occupation, which requires theoretical and practical application of a body of highly specialized knowledge and attainment of a baccalaureate or higher degree in the specific specialty. No Action Baseline: There maybe transparency benefits due to this proposed change. This provision will improve program integrity. □ Pre-Policy Baseline: None DHS/USCIS□ None 17. Additional Time Burden for Form 1-129 H-lB VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 □ This proposed rule would increase the burden per response by 5 minutes Due to PO 00000 Frm 00055 Fmt 4701 Quantitative: Petitioners □ DHS estimates that the time to complete and Sfmt 4725 E:\FR\FM\23OCP3.SGM Quantitative: Petitioners □ None 23OCP3 EP23OC23.026</GPH> lotter on DSK11XQN23PROD with PROPOSALS3 DHS/USCIS□ None Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules lotter on DSK11XQN23PROD with PROPOSALS3 18. Additional Time Burden for H Classification Supplement toForml-129 □ changes in the instructions, adding clarifying language regarding the denial or revocation of approved H- lB petitions, adding information collection elements related to the beneficiary-centric registration selection option, namely the collection of passport information and related instructional language, and adding verification before submitting instructions. This proposed rule would increase the burden per response 5 minutes. Due to changes in the instructions, adding clarifying language regarding the denial or revocation of approved H-lB petitions, adding information collection elements related to the beneficiary-centric registration selection option, namely the collection of passport information and related instructional language, and adding verification before submitting instructions. submit Form 1-129 H1B would cost $4,578,144 annually. DHS/USCIS□ None Quantitative: Petitioners □ DHS estimates that the time to complete and submit Form 1-129 H1B H Classification would cost $4,005,877 annually. Frm 00056 Fmt 4701 DHS/USCIS □ None DHS/USCIS□ None Qualitative: Petitioners □ None DHS/USCIS□ None drupal_files/omb/circulars/A4/a-4.pdf (last viewed June 1, 2021). PO 00000 Quantitative: Petitioners □ None Qualitative: Petitioners □ None DHS/USCIS□ None 167 OMB, Circular A–4 (Sept. 17, 2003), https:// www.whitehouse.gov/wp-content/uploads/legacy_ Jkt 262001 DHS/USCIS□ None DHS/USCIS□ None A–4, Table 13 presents the prepared accounting statement showing the costs 19:04 Oct 20, 2023 Qualitative: Petitioners □ None Qualitative: Petitioners □ None Inaddition to the impacts summarized above, and as required by OMB Circular VerDate Sep<11>2014 DHS/USCIS □ None Sfmt 4702 and benefits that would result if this proposed rule is finalized.167 E:\FR\FM\23OCP3.SGM 23OCP3 EP23OC23.027</GPH> 72924 Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules Table 13. 0MB A-4 Accounting Statement ($ millions, FY 2021) Time Period: FY 2022 throu!!h FY 2031 Minimum Category Primary Estimate Estimate BENEFITS Annualized quantified, but unmonetized, benefits NIA NIA Source Citation Regulatory Impact Analysis (RIA) NIA Monetized Benefits Unquantified Benefits Maximum Estimate 72925 NIA The pmpose of the changes in this proposed rule is to ensure that petitioners may have clarity and may reduce the amount of redundant work for each beneficiary. DHS anticipates that codifying and providing clarification of the requirements for maintenance of status applications would at least render some RFEs and NOIDs unnecessary; therefore, may save the petitioner's time. In addition, these changes would improve the integrity of the H-lB program by preventing certain abuses. DHS is also proposing to change the automatic extension end date from October 1 to April 1 of the relevant fiscal year to avoid disruptions in employment authorization that some F-1 nonimmigrants seeking cap-gap extensions have been experiencing over the past several years. RIA RIA COSTS Annualized monetized costs (7%) $6.3 Annualized monetized costs (3%) $6.3 RIA Annualized quantified, but unmonetized, costs DHS anticipates that USCIS adjudicators may issue more RFEs and NOIDs related to registrations with false information under this proposed rule, which would increase the burden on petitioners and adjudicators. Changes to the site visit provision may affect employers who do not cooperate with site visits who would face denial or revocation of their petition(s), which could result in costs to those businesses. Petitioners may face financial losses because they may lose access to labor for extended periods, which could result in too few workers, loss of revenue, and some could go out of business. DHS expects program participants to comply with program requirements, however, and notes that those that do not could experience significant impacts due to this proposed rule. DHS ex-pects that the proposed rule would hold certain petitioners more accountable for violations, including certain findings of labor law and other violations, and would prevent registrations with false information from taking a cap number for which they are ineligible. TRANSFERS Annualized monetized transfers (7%) VerDate Sep<11>2014 19:04 Oct 20, 2023 RIA NIA Jkt 262001 PO 00000 Frm 00057 Fmt 4701 Sfmt 4725 E:\FR\FM\23OCP3.SGM 23OCP3 EP23OC23.028</GPH> lotter on DSK11XQN23PROD with PROPOSALS3 Qualitative (unquantified)costs NIA 72926 Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules Annualized monetized transfers (3%) NIA From whom to whom? Effects Source Citation None RIA Effects on small businesses None RIA Effects on wages Effects on growth None None None None BILLING CODE 9111–97–C 3. Costs, Transfers, and Benefits of the Proposed Rule 2. Background lotter on DSK11XQN23PROD with PROPOSALS3 The purpose of this rulemaking is to propose changes that DHS believes would modernize and improve the regulations relating to the H–1B program by: (1) streamlining the requirements of the H–1B program and improving program efficiency; (2) providing greater benefits and flexibilities for petitioners and beneficiaries; and (3) improving integrity measures. Some of the proposed provisions would narrowly impact other nonimmigrant classifications. a. Amended Petitions DHS proposes to clarify when an amended or new H–1B petition must be filed due to a change in an H–1B worker’s place of employment. Specifically, this rule proposes to clarify that any change of work location that requires a new LCA is itself considered a material change and therefore requires the petitioning employer to file an amended or new petition with USCIS before the H–1B worker may perform work under the changed conditions. This proposed change would clarify requirements for H–1B amended petitions by codifying Matter of Simeio 168 and incorporating DOL rules on when a new LCA is not necessary. DHS estimates that this proposed change would save petitioners filing amended petitions 5 minutes for each petition (0.08 hours). USCIS received a low of 17,057 amended petitions in FY 2022, and a high of 80,102 amended petitions in FY 2018. Based on the 5-year annual average, DHS estimates that 59,947 petitioners file for an amended petition each year shown in Table 14. DHS does not know if all of these amended petitions are due to a change in an H– 1B worker’s place of employment. Because of this, DHS cannot estimate how many of these new and amended petitions would benefit by consolidating existing requirements and providing clearer regulatory text pertaining to when a petitioner must submit an amended or new petition. Table 14. Form 1-129 H-lB Classification Amended Petitions, Petition for a Nonimmigrant Worker, FY 2018 through FY 2022 Form 1-129 H-lB Form 1-129 H-lB Percentage of Form 1-129 H-lB Receipts Receipts Fiscal Year Total Received without Received with filed with Form Form G-28 Form G-28 G-28 2018 27,258 52,844 80,102 66% 2019 17,038 47,358 64,396 74% 2020 21,082 51,481 72,563 71% 2021 19,128 46,488 65,616 71% 2022 4,120 12,937 17,057 76% 70% 5-vear Total 88,626 211,108 299,734 5-year Annual 70% 17,725 42,222 59,947 Average Source: USCIS, Office of Policy and Strategy, Policy Research Division (PRD), CLAIMS3 and ELIS databases, Mar. 13, 2023. 168 See USCIS, ‘‘USCIS Final Guidance on When to File an Amended or New H–1B Petition After Matter of Simeio Solutions, LLC,’’ PM–602–0120 VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 (July 21, 2015), https://www.uscis.gov/sites/default/ files/document/memos/2015-0721_Simeio_ PO 00000 Frm 00058 Fmt 4701 Sfmt 4725 Solutions_Transition_Guidance_Memo_Format_7_ 21_15.pdf. E:\FR\FM\23OCP3.SGM 23OCP3 EP23OC23.029</GPH> EP23OC23.030</GPH> From whom to whom? Miscellaneous Analvses/Cat(!f!orv Effects on State, local, or tribal governments Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules DHS conducted a sensitivity analysis to estimate the number of petitions that may benefit from this proposed change. Table 15 presents the lower and upper bound number of petitions filed annually for amended petitions and for 72927 new petitions, which corresponds to a range of 10 to 90 percent. Table 15. Estimated Annual Number of Form 1-129 H-lB Petitions that Are New or Amended I Estimated Annual Amended Petitions I Petitioners 59.947 I I Lower Bound (10%) 5 995 I I UooerBound (90%) 53.952 Source: USCIS analysis Using the lower and upper bounds of the estimated annual population for the petitioners who would file amended petitions, DHS estimates the cost savings based on the opportunity cost of time of gathering and submitting information by multiplying the estimated time burden savings for those filing an amended petition (5 minutes or 0.08 hours) by the compensation rate of an HR specialist, in-house lawyer, or outsourced lawyer, respectively. DHS does not know the exact number of petitioners who will choose an in-house or an outsourced lawyer but assumes it may be a 50/50 split and therefore provides an average. Table 16 shows that the total annual cost savings would range from $59,545 to $535,801. DHS estimates the total cost savings to be the average between the lower bound and the upper bound estimates. Based on this DHS estimates the average cost savings from this provision to be $297,673. BILLING CODE 9111–97–P Table 16. Estimated Cost Savin2s to Form 1-129 H-lB Petitioners Time Burde Affected Compensation n Population Rate (Hours ) A B C Lower Bound Estimated Number of Petitions (Lower Bound) HR specialist 1,799 0.08 $50.94 In-house lawver 4,197 0.08 $114.17 Outsourced lawyer 4,197 0.08 $196.85 Total - Lower Bound 5,996 Unner Bound Estimated Number of Petitions (Upper Bound) HR specialist In-house lawyer Outsourced lawver Total - Upper Bound 16,186 37,766 37,766 53,952 0.08 0.08 0.08 $50.94 $114.17 $196.85 Total Annual Cost D=AxBxC $7,331 $38,334 $66,094 $59,545 $65,961 $344,940* $594,739* $535,801 $297,673 Total Cost Savings Average Source: USCIS analysis *Note: DHS does not know the exact number of petitioners who will choose an in-house or an outsourced lawyer but assumes it may be a 50/50 split and therefore provides an average. b. Deference to Prior USCIS Determinations of Eligibility in Requests for Extensions of Petition Validity DHS seeks to codify and clarify its existing deference policy at proposed 8 CFR 214.1(c)(5). Deference has helped promote consistency and efficiency for both USCIS and its stakeholders. The deference policy instructs officers to VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 consider prior determinations involving the same parties and facts, when there is no material error with the prior determination, no material change in circumstances or in eligibility, and no new material information adversely impacting the petitioner’s, applicant’s, or beneficiary’s eligibility. This provision proposes to codify the PO 00000 Frm 00059 Fmt 4701 Sfmt 4702 deference policy169 dated April 27, 2021. Relative to the no action baseline there are no costs to the public. The benefit of codifying this policy is that 169 See USCIS, ‘‘Deference to Prior Determinations of Eligibility in Requests for Extensions of Petition Validity, Policy Alert,’’ PA– 2021–05 (April 27, 2021), https://www.uscis.gov/ sites/default/files/document/policy-manualupdates/20210427-Deference.pdf (last visited on Mar. 23, 2023). E:\FR\FM\23OCP3.SGM 23OCP3 EP23OC23.031</GPH> EP23OC23.032</GPH> lotter on DSK11XQN23PROD with PROPOSALS3 BILLING CODE 9111–97–C 72928 Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules there may be some transparency benefits to having the policy in the CFR so the public has the requirements in one place. Relative to a pre-policy baseline petitioners may need to take time to familiarize themselves with those changes made in the 2021 deference policy memo. The provision applies to all nonimmigrant classifications for which form I–129 is filed to request an extension of stay (i.e., E–1, E–2, E–3, H– 1B, H–1B1, H–2A, H–2B, H–3, L–1, O– 1, O–2, P–1, P–1S, P–2, P–2S, P–3, P– 3S, Q–1, R–1, and TN nonimmigrant classifications). The deference policy had been in effect since 2004 but was rescinded in 2017. After USCIS rescinded deference in 2017, the number of RFEs and denials increased. Table 17 shows the number for Form I–129 RFEs filed for an extension of stay or amendment of stay, who are applying for a continuation of previously approved employment or a change in previously approved employment from FY 2018 through FY 2022. USCIS received a low of 13,467 RFEs for Form I–129 classifications in FY 2022, and a high of 43,430 RFEs for Form I–129 classifications in FY 2020. Based on a 5year annual average, 31,327 petitioners who filed for an extension of stay or amendment of stay, who are applying for a continuation of previously approved employment or a change in previously approved employment receive an RFE for Form I–129 per year. Table 17. Total Form 1-129 Receipts Filed for an Extension of Stay or Amendment of Stay, Who Are Applying for a Continuation of Previously Approved Employment or a Change in Previously Aooroved Employment, FY 2018 Through FY 2022 Reported Fiscal RFE Count Non-RFE Count Total Year 2018 34,202 114,425 148,627 2019 42,097 122,457 164,554 2020 43,430 142,622 186,052 2021 23,440 138,952 162,392 2022 13,467 126,767 140,234 5-vear Total 156,636 645,223 801,859 5-year Annual 31,327 129,045 160,372 Average Source: USCIS, Office of Policy and Strategy, PRD, CLAIMS3 and ELIS databases, Mar. 13, 2023. facts would not need to re-adjudicate eligibility. The reduction in RFEs may save time and make the overall process faster for petitioners and USCIS. Table 18 shows the number of Form I–129 receipts, submitted concurrently with a Form G–28, filed for a continuation of previously approved employment or a change in previously approved employment, and requesting an extension of stay or amendment of stay, on which USCIS issued an RFE. Based on the 5-year annual average, DHS estimates that 23,475 petitioners who received an RFE filed with a Form G–28 and 7,853 petitioners who received an RFE filed without a Form G–28. BILLING CODE 9111–97–P Table 18. Form 1-129, Petition for a Nonimmigrant Worker Receipts Filed for an Extension of Stay or Amendment of Stay, Who Are Applying for a Continuation of Previously Approved Employment or a Change in Previously Approved Employment, with an RFE Submitted Concurrently with Form G-28, FY 2018 Through FY 2022 Form 1-129 Form 1-129 Total Form 1-129 Percentage of Fiscal Receipts Received Receipts Received Receipts Received Form 1-129 filed Year withRFE with Form G-28 without Form G-28 with Form G-28 2018 10.512 23 690 34 202 69% 13,450 2019 28 647 42 097 68% 2020 9 131 34 299 43 430 79% 2021 3 888 19 552 23 440 83% 2022 2 282 11185 13 467 83% 5-year 75% 39,263 117,373 156,636 Total 5-year 75% Annual 7,853 23,475 31,327 Avera2e Source: USCIS Office of Policy and Strategy PRD CLAIMS3 and ELIS databases Mar. 13 2023. VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 PO 00000 Frm 00060 Fmt 4701 Sfmt 4725 E:\FR\FM\23OCP3.SGM 23OCP3 EP23OC23.033</GPH> EP23OC23.034</GPH> lotter on DSK11XQN23PROD with PROPOSALS3 DHS is proposing to codify the deference policy that applies to the adjudication of a petition. This proposed change could affect the number of RFEs that USCIS sends for Form I–129. USCIS estimates that there may be a reduction in RFEs, as officers adjudicating a Form I–129 involving the same parties and the same underlying Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules DHS conducted a sensitivity analysis to estimate the number of petitions that may benefit from codifying and clarifying its existing deference policy. Table 19 presents the lower and upper bound number of petitions filed 72929 annually for amended petitions and for new petitions, which corresponds to a range of 10 to 90 percent. Table 19. Estimated Number of Form 1-129 Petitions with RFEs I Estimated RFE Petitions Source: USCIS analysis I Using the lower and upper bounds of the estimated annual population for the petitioners who may no longer have to provide duplicative data, DHS estimates the cost savings based on the opportunity cost of time of gathering and submitting duplicative information by multiplying the estimated time burden to gather information 10 minutes Petitioners 31,327 I I Lower Bound (10%) 3 133 (0.167 hours) by the compensation rate of an HR specialist, in-house lawyer, or outsourced lawyer, respectively. DHS does not know the exact number of petitioners who will choose an in-house or an outsourced lawyer but assumes it may be a 50/50 split and therefore provides an average. Table 20 shows that the total annual cost savings due to I I Unner Bound (90%) 28 194 the codifying and clarifying its existing deference policy would range from $67,691 to $609,132. DHS estimates the total cost savings to be the average between the lower bound and the upper bound estimates. Based on this DHS estimates the average cost savings from this provision to be $338,412. Table 20. Estimated Cost Savings to Form 1-129 Petitioners due to Codifying and Clarifying the Deference Policv Total Affected Time Burden Compensation Annual Population (Hours) Rate Cost D=AxBxC A B C Lower Bound Estimated Number of Petitions (Lower Bound) HR specialist 783 0.167 $50.94 $6 661 In-house lawver 2 350 0.167 $114.17 $44 806 Outsourced lawyer 2 350 0.167 $196.85 $77 254 $67,691 Total - Lower Bound 3 133 lotter on DSK11XQN23PROD with PROPOSALS3 BILLING CODE 9111–97–C c. Evidence of Maintenance of Status DHS seeks to clarify current requirements and codify current practices concerning evidence of maintenance of status at proposed 8 CFR 214.1(c)(1) through (7). Primarily, DHS seeks to clarify that evidence of maintenance of status is required for petitions where there is a request to extend or amend the beneficiary’s stay. This proposed change would list examples of additional evidence types VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 that petitioners may provide, but would not limit petitioners to those specific evidence types. The proposed form instructions further state that if the beneficiary is employed in the United States, the petitioner may submit copies of the beneficiary’s last two pay stubs, Form W–2, and other relevant evidence, as well as a copy of the beneficiary’s Form I–94, passport, travel document, or Form I–797. This proposed change may decrease the number of RFEs and NOIDs by clearly stating what types of PO 00000 Frm 00061 Fmt 4701 Sfmt 4702 supporting documentation are relevant and clarifying that petitioners should submit such supporting documentation upfront, rather than waiting for USCIS to issue a request for additional information. This may benefit petitioners by saving them the time to review and respond to RFEs and NOIDs. DHS is proposing to codify into regulation the instructions that, when seeking an extension of stay, the applicant or petitioner must submit supporting evidence to establish that the E:\FR\FM\23OCP3.SGM 23OCP3 EP23OC23.035</GPH> EP23OC23.036</GPH> Unner Bound Estimated Number of Petitions (Upper Bound) HR specialist 7 049 0.167 $50.94 $59 966 21,146 In-house lawyer 0.167 $114.17 $403 178* 21.146 0.167 $196.85 $695 153* Outsourced lawver 28,195 $609,132 Total - Upper Bound $338,412 Total Cost Savin2s Avera2e Source: USCIS analysis * Note: DHS does not know the exact number of petitioners who will choose an in-house or an outsourced lawyer but assumes it may be a 50/50 split and therefore provides an average. 72930 Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules applicant or beneficiary maintained the previously accorded nonimmigrant status before the extension request was filed. Additionally, DHS is proposing to remove the sentence: ‘‘Supporting evidence is not required unless requested by the director.’’ 170 DHS expects that these proposed changes would reduce confusion for applicants and petitioners, clarify what evidence is required for all extension of stay requests, and simplify adjudications by decreasing the need for RFEs and NOIDs. Based on the 5-year annual average, DHS estimates that 299,025 Form I–129 petitions are filed requesting an extension of stay. Of those total filed petitions, DHS estimates that 61,781 petitioners who requested an extension of stay received an RFE and the remaining 237,244 did not receive and RFE as shown in Table 21. Table 21. Form 1-129 Extension of Stay, Petition for a Nonimmigrant Worker, FY 2018 through FY 2022 Fiscal Year Total RFE Count Non-RFE Count 2018 85,849 187,662 273,511 2019 83,454 199,477 282,931 2020 71,804 247,953 319,757 2021 40,990 270,396 311,386 2022 26,806 280,732 307,538 5-year Total 308,903 1,186,220 1,495,123 5-year Annual Average 61,781 237,244 299,025 Source: USCIS, Office of Policy and Strategy, PRD, CLAIMS3 and ELIS databases, Mar. 13, 2023. DHS estimates that 29,195 petitions are filed requesting to amend the stay. Of those, DHS estimates that 9,723 petitions that are filed requesting to amend the stay receive an RFE and 19,473 do not receive an RFE. Table 22. Form 1-129 Amend the Stay, Petition for a Nonimmigrant Worker, FY 2018 through FY 2022 Fiscal Year Total RFE Count Non-RFE Count 2018 21,617 16,328 37,945 2019 14,625 16,939 31,564 2020 7,235 20,056 27,291 2021 2,824 20,351 23,175 2022 2,312 23,690 26,002 5-year Total 48,613 97,364 145,977 5-year Annual Average 9,723 19,473 29,195 DHS estimates that 89,241 petitions are filed requesting to change status and extend the stay. Of those, DHS estimates that 30,318 petitions that are filed requesting to change status and extend the stay receive an RFE and 58,922 do not receive an RFE. 170 See proposed 8 CFR 214.2(h)(14). See also proposed 8 CFR 214.2(l)(14)(i) (removing ‘‘Except in those petitions involving new offices, supporting documentation is not required, unless requested by the director.’’); proposed 8 CFR 214.2(o)(11) and (p)(13) (removing ‘‘Supporting documents are not required unless requested by the Director.’’). VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 PO 00000 Frm 00062 Fmt 4701 Sfmt 4702 E:\FR\FM\23OCP3.SGM 23OCP3 EP23OC23.037</GPH> EP23OC23.038</GPH> lotter on DSK11XQN23PROD with PROPOSALS3 Source: USCIS, Office of Policy and Strategy, PRD, CLAIMS3 and ELIS databases, Mar. 13, 2023. Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules 72931 Table 23. Form 1-129 Petition for a Nonimmigrant Worker Requesting New Employment with a COS, FY 2018 throu2h FY 2022 Fiscal Year Total RFE Count Non-RFE Count 2018 48,884 45,343 94,227 2019 44,096 50,879 94,975 2020 23,943 65,958 89,901 2021 18,354 61,641 79,995 2022 16,315 70,790 87,105 5-year Total 151,592 294,611 446,203 5-year Annual Average 30,318 58,922 89,241 It is important to note that issuing RFEs and NOIDs takes time and effort for adjudicators—to send, receive, and adjudicate documentation—and it requires additional time and effort for applicants or petitioners to respond, resulting in extended timelines for adjudications.171 Data on RFEs and NOIDs related to maintenance of status are not standardized or tracked in a consistent way, thus they are not very accurate or reliable. Within this context, the data can provide some insight, however minimal, that these requests and notices have been present and that they continue to occur. DHS anticipates that USCIS adjudicators may issue fewer RFEs and NOIDs related to maintenance of status under this proposed rule due to clarity of what types of supporting documentation are relevant and clarification that petitioners should submit such supporting documentation upfront, rather than waiting for USCIS to issue a request for additional information, which would reduce the burden on applicants, petitioners, and adjudicators, and save time processing applications and petitions. Because the data are not standardized or tracked consistently DHS cannot estimate how many RFEs and NOIDs are related to maintenance of status. d. Eliminating the Itinerary Requirement for H Programs DHS is proposing to eliminate the H programs’ itinerary requirement. See proposed 8 CFR 214.2(h)(2)(i)(B) and (F). Current 8 CFR 214.2(h)(2)(i)(B) states that ‘‘A petition that requires services to be performed or training to be received in more than one location must include an itinerary with the dates and locations of the services or training and must be filed with USCIS as provided in the form instructions.’’ In addition, current 8 CFR 214.2(h)(2)(i)(F) contains additional language requiring an itinerary for H petitions filed by agents as the petitioner. DHS recognizes this change may affect H–1B petitioners filing for beneficiaries performing services in more than one location and submitting itineraries. However, due to the absence of detailed data on petitioners submitting itineraries, DHS estimates the affected population as the estimated number of petitions filed annually for workers placed at off-site locations. DHS assumes the petitions filed for workers placed at off-site locations are likely to indicate that beneficiaries may be performing services at multiple locations and, therefore, petitioners are likely to submit itineraries. Eliminating the itinerary requirement would reduce petitioner burden and promote more efficient adjudications, without compromising program integrity. This proposed change may benefit petitioners who have beneficiaries at alternative worksites. Table 24 shows the total number of Form I–129 H–1B Receipts with and without Form G–28, FY 2018 through FY 2022. USCIS received a low of 398,285 Form I–129 H–1B Receipts in FY 2021, and a high of 474,311 Form I– 129 H–1B Receipts in FY 2022. Based on the 5-year annual average, DHS estimates that there are 427,822 Form I– 129 H–1B petitioners each year. 171 The regulations state that when an RFE is served by mail, the response is timely filed if it is received no more than 3 days after the deadline, providing a total of 87 days for a response to be submitted if USCIS provides the maximum period of 84 days under the regulations. The maximum response time for a NOID is 30 days. See https:// www.uscis.gov/policy-manual/volume-1-part-echapter-6. VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 PO 00000 Frm 00063 Fmt 4701 Sfmt 4702 E:\FR\FM\23OCP3.SGM 23OCP3 EP23OC23.039</GPH> lotter on DSK11XQN23PROD with PROPOSALS3 Source: USCIS, Office of Policy and Strategy, PRD, CLAIMS3 and ELIS databases, Mar. 13, 2023. 72932 Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules Table 24. Total Form 1-129 H-lB Receipts with and without Form G-28, FY 2018 through FY 2022 Percentage Form 1-129 H-lB Form 1-129 H-lB Total Form Iof Form IReceipts 129 H-lB 129 H-lB FY Receipts Received Received with without Form G-28 Receipts filed with Form G-28 Form G-28 418,604 2018 94 055 324 549 78% 420,622 2019 90 845 329 777 78% 427,289 2020 90 192 337 097 79% 398,285 2021 79 195 319 090 80% 474,311 2022 90 574 383 737 81% 444,861 1,694,250 2,139,111 79% 5-vear Total 5-year Annual 79% 88,972 338,850 427,822 Average Source: USCIS Office of Policv and Strategy PRD CLAIMS3 and ELIS databases Mar. 13 2023. Table 25 shows the average number of Form I–129 H–1B petitions approved in FYs 2018–22 for workers placed at offsite locations. Nearly 31 percent of petitions were approved for workers placed at off-site locations. DHS uses the estimated 31 percent as the proportion of both the population of received petitions and the population of approved petitions that are for workers placed at off-site locations. Table 25. Form 1-129 H-lB Petitions for Workers Placed at Off-site Locations, FY 2018 through FY 2022 Total Approved Petitions for FY Workers Placed at Total Approved Percent Placed at OffOff-site locations Petitions site locations 2018 108,981 289,142 38% 2019 118,948 332,384 36% 2020 138,229 363,428 38% 2021 99,974 356,046 28% 2022 73,176 413,395 18% 31% 5-vear Total 539,308 1,754,395 31% 5-year Annual Average 107,862 350,879 Source: USCIS, Office of Policy and Strategy, PRD. April 6, 2023 may submit itineraries, which corresponds to a range of 10 to 90 percent. lotter on DSK11XQN23PROD with PROPOSALS3 Table 26. Estimated Number of Form 1-129 H-lB Petitions Who May Submit Itineraries Estimated Number of Petitions Submit Itineraries among Workers Estimated Number of Petitions Placed at Off-site Locations Filed Annually for Workers Placed at Off-site Locations Lower Bound (10%) Unner Bound (90%) B=Ax10% C=Ax90% A 13,263 119,363 132,625 Source: USCIS analysis Using the lower and upper bounds of the estimated annual population for H– 1B petitioners who may no longer be required to gather and submit itinerary information, DHS estimates the cost savings based on the opportunity cost of time of gathering and submitting itinerary information by multiplying the estimated time burden to gather 172 DHS uses the proportion of petitions approved for off-site workers (31 percent from Table 25) as an approximate measure to estimate the number of petitions received annually for off-site workers from the total number of petitions filed. 132,625 petitions filed requesting off-site workers = 427,822 petitions filed annually × 31 percent. VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 PO 00000 Frm 00064 Fmt 4701 Sfmt 4702 E:\FR\FM\23OCP3.SGM 23OCP3 EP23OC23.042</GPH> contain itineraries (132,625).172 Table 26 presents the lower and upper bound number of petitions filed annually for workers placed at off-site locations who EP23OC23.040</GPH> EP23OC23.041</GPH> DHS conducted a sensitivity analysis to estimate the number of H–1B petitions filed annually for workers placed at off-site locations that may Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules itinerary information (0.08 hours) by the compensation rate of an HR specialist, in-house lawyer, or outsourced lawyer, respectively. Table 27 shows that the total annual cost savings due to the itinerary exemption would range from $141,704 to $1,275,277. Since the itinerary information normally is submitted with the Form I–129 H–1B package, there would be no additional postage cost savings. DHS estimates the total cost savings to be the average 72933 between the lower bound and the upper bound estimates. Based on this DHS estimates the average cost savings from this provision to be $708,491. BILLING CODE 9111–97–P Table 27. Estimated Cost Savings to Form 1-129 H-lB Petitioners due to Not Submitting an Itinerary Affected Time Burden Compensatio Total Annual (Hours) nRate Population Cost D=AxBxC A B C Lower Bound Estimated Number of Petitions Submit Itineraries (Lower Bound) HR specialist 2,785 0.08 $50.94 $11,349 In-house lawver 10,478 0.08 $114.17 $95,702 Outsourced lawver 10.478 0.08 $196.85 $165 008 13,263 $141,704 Total - Lower Bound Unner Bound Estimated Number of Petitions Submit Itineraries (Unner Bound) 25,066 HR specialist 0.08 $50.94 $102 149 In-house lawver 94.297 0.08 $114.17 $861 269 $1 484,986 94,297 0.08 $196.85 Outsourced lawver 119,363 $1,275,277 Total - Unner Bound $708,491 Total Cost Savine:s Averae:e Source: USCIS analysis HR specialist (2,785) = Total-lower bound (13,263) x Percent of petitions filed by HR specialist (21 %) In-house lawyer (10,478) = Total-lower bound (13,263) x Percent of petitions filed by in-house lawyer (79%) Outsourced lawyer (10,478) = Total-lower bound (13,263) x Percent of petitions filed by outsourced lawyer (79%) DHS does not know the exact number of petitioners who will choose an in-house or an outsourced lawyer but assumes it may be a 50/50 split and therefore provides an average. lotter on DSK11XQN23PROD with PROPOSALS3 BILLING CODE 9111–97–C DHS acknowledges the proposal to eliminate the itinerary requirement may also affect H petitions filed by agents as well as H–2 petitions filed for beneficiaries performing work in more than one location or for multiple employers, however, DHS has not estimated these cost savings here. e. Validity Period Expires Before Adjudication DHS proposes to allow H–1B petitions to be approved or have their requested validity period dates extended if USCIS adjudicates and deems the petition VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 approvable after the initially requested validity period end-date, or the period for which eligibility has been established, has passed. This typically would happen if USCIS deemed the petition approvable upon a favorable motion to reopen, motion to reconsider, or appeal. If USCIS adjudicates an H–1B petition and deems it approvable after the initially requested validity period enddate, or the last day for which eligibility has been established, USCIS may issue an RFE asking whether the petitioner wants to update the dates of intended employment. This change may increase PO 00000 Frm 00065 Fmt 4701 Sfmt 4702 the number of RFE’s; however, it may save petitioners from having to file another H–1B petition and USCIS from having to intake and adjudicate another petition. If in response to the RFE the petitioner confirms that it wants to update the dates of intended employment and submits a different LCA that corresponds to the new requested validity dates, even if that LCA was certified after the date the H– 1B petition was filed, and assuming all other eligibility criteria are met, USCIS would approve the H–1B petition for the new requested period or the period for E:\FR\FM\23OCP3.SGM 23OCP3 EP23OC23.043</GPH> HR specialist (25,066) = Total-upper bound (119,363) x Percent of petitions filed by HR specialist (21%) In-house lawyer (94,297) =Total-upper bound (119,363) x Percent of petitions filed by in-house lawyer (79%) Outsourced lawyer (94,297) =Total-upper bound (119,363) x Percent of petitions filed by outsourced lawver (79%) 72934 Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules which eligibility has been established, as appropriate, rather than require the petitioner to file a new or amended petition. Under a no-action baseline, the requirement to file an amended or new petition results in additional filing costs and burden for the petitioner. DHS expects that this proposed change would save petitioners the difference between the opportunity cost of time and the fee to file an additional form, and the nominal opportunity cost of time and expense associated with responding to the RFE. This proposed change would benefit beneficiaries selected under the cap, who would retain cap-subject petitions while their petition validity dates are extended or whose petitions now may be approved rather than denied based on this technicality. lotter on DSK11XQN23PROD with PROPOSALS3 f. H–1B Cap Exemptions DHS proposes to revise the requirements to qualify for H–1B cap exemption when a beneficiary is not directly employed by a qualifying institution, organization, or entity at 8 CFR 214.2(h)(8)(iii)(F)(4). These proposed changes intend to clarify, simplify, and modernize eligibility for cap-exempt H–1B employment, so that they are less restrictive and better reflect modern employment relationships. The proposed changes also intend to provide additional flexibility to petitioners to better implement Congress’s intent to exempt from the annual H–1B cap certain H–1B beneficiaries who are employed at a qualifying institution, organization, or entity. DHS is also proposing to revise 8 CFR 214.2(h)(19)(iii)(C), which states that a nonprofit research organization is an entity that is ‘‘primarily engaged in basic research and/or applied research,’’ and a governmental research organization is a Federal, State, or local entity ‘‘whose primary mission is the performance or promotion of basic research and/or applied research.’’ DHS proposes to replace ‘‘primarily engaged’’ with ‘‘a fundamental activity of’’ in order to permit a nonprofit entity that conducts research as a fundamental activity but is not primarily engaged in research to meet the definition of a nonprofit research entity. This would likely increase the population of petitioners who are now eligible for the cap exemption and, by extension, would 173 Calculation: 355,592 registrations * 0.3% = 1,067 registrations. 174 Calculation: 355,592 registrations * 0.8% = 2,845 registrations. VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 likely increase the number of petitions that may be cap-exempt. These proposed changes would result in a transfer to petitioners who qualify for a cap exemption for their employees under the proposed rule. This would reduce transfers for petitioners because the petitioners would no longer have to pay the registration fee or ACWIA fees applicable to initial cap-subject petitions. DHS does not have data to precisely estimate how many additional petitioners would now qualify for these cap exemptions, but we welcome public comment on this topic to help inform analysis in the final rule. This proposed change would be a reduction in transfers from the petitioners to USCIS because USCIS would no longer receive these petitioners’ registration fees. There would be no change in DHS resources. While DHS cannot estimate the precise reduction in transfers, DHS estimates that a fairly small population, between 0.3 percent–0.8 percent of annual petitioners, may no longer use the H–1B registration tool as a result of these new exemptions. Using these percentages, DHS estimates that approximately 1,067 173 (0.3 percent) up to 2,845 174 (0.8 percent) registrants would no longer pay the $10 registration fee. DHS estimates the reduction in transfers from registrants to range from $10,670 175 to $28,450 176 annually. DHS invites public comment on these transfers to cap exempt petitioners and the percentage of current registrants (prospective petitioners who are cap subject) who may no longer submit a registration for the H–1B cap. While DHS discusses these transfers qualitatively in this proposal, DHS intends to quantify them in the final rule. Aside from the reduction in transfers from not having to pay the registration fee, petitioners that qualify under the proposed cap exemptions would also benefit from not having to wait for H– 1B cap season to commence employment. This may allow approved petitioners to have their H–1B workers commence employment earlier, prior to the beginning of the fiscal year on October 1. g. Automatic Extension of Authorized Employment ‘‘Cap-Gap’’ DHS proposes to extend the automatic cap-gap extension at 8 CFR 214.2(f)(5)(vi). Currently, the automatic 175 Calculation: 1,067 registrations * $10 registration fee = $10,670 cost savings. 176 Calculation: 2,845 registrations * $10 registration fee = $28,450 cost savings. PO 00000 Frm 00066 Fmt 4701 Sfmt 4702 extension is valid only until October 1 of the fiscal year for which H–1B status is being requested, but DHS proposes to extend this until April 1 of the fiscal year. See proposed 8 CFR 214.2(f)(5)(vi). This change would result in more flexibility for both students and USCIS and would help to avoid disruption to U.S. employers that are lawfully employing F–1 students while a qualifying H–1B cap-subject petition is pending. Each year, a number of U.S. employers seek to employ F–1 students via the H–1B program by requesting a COS and filing an H–1B cap petition with USCIS. Many F–1 students complete a program of study or postcompletion OPT in mid-spring or early summer. Per current regulations, after completing their program or postcompletion OPT, F–1 students have 60 days to take the steps necessary to maintain legal status or depart the United States.177 However, because the change to H–1B status cannot occur earlier than October 1, an F–1 student whose program or post-completion OPT expires in mid-spring has two or more months following the 60-day period before the authorized period of H–1B status begins. Under current regulations, the automatic cap-gap extension is valid only until October 1 of the fiscal year for which H–1B status is being requested. DHS is proposing to change the automatic extension end date from October 1 to April 1 to avoid disruptions in employment authorization that some F–1 nonimmigrants awaiting the change to H–1B status have been experiencing over the past several years. Table 28 shows the historical completions volumes. Based on the 5-year annual average, DHS estimates that 31,834 F–1 nonimmigrants annually may be able to avoid employment disruptions while waiting to obtain H–1B status. Preventing such employment disruptions would also benefit employers of F–1 nonimmigrants with cap-gap extensions. The change in the automatic extension end date may benefit petitioners as well. 177 See E:\FR\FM\23OCP3.SGM 8 CFR 214.2(f)(5)(iv). 23OCP3 Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules 72935 Table 28. Historical Form 1-129 Petitions Seeking Initial H-lB Status for Beneficiaries Who Are in F-1 Status and Seekin!! a COS to H-lB Pendin!! October 1-Anril 1 Volume. FY 2018 throu!!h FY 2022 Fiscal Year Pending Petitions October 1-April 1 41,606 43,975 26,967 23,339 23,282 159,169 31,834 This proposed change in the automatic extension end date would also allow USCIS greater flexibility in allocating officer resources to complete adjudications without the pressure of completing as many COS requests as possible before October 1. There are additional benefits of this proposed rule that have not been captured in the summary of costs and benefits of this rulemaking. DHS estimates that this change would benefit up to 5 percent (1,592) of the population (31,834) on an annual basis and on the low end 318 (1 percent); however, F–1 students who are beneficiaries of H–1B cap petitions that provide cap-gap relief would be able to avoid employment disruptions while waiting to obtain H–1B status. DHS estimates that an F–1 student who is the beneficiary of an H–1B cap petition makes $42.48 178 per hour in compensation. Based on a 40 hour work week,179 DHS estimates the potential compensation for each F–1 student who is the beneficiary of an H–1B cap petition to be $44,174 180 for 6 months of employment from October 1st to April 1st. DHS estimates that this potential compensation may be a benefit to F–1 students who are seeking a COS to a H–1B status. This benefit ranges from $14,047,332 181 to $70,325,008 182 annually. In addition, other impacts such as payroll taxes and adjustments for the value of time have not been monetized here, which would reduce the monetized benefit of this compensation. DHS intends to include these impacts in the final rule and invites public comment on these additional benefits to F–1 students who would be the beneficiaries of H–1B petitions. 178 $42.48 Total Employee Compensation per hour. See BLS, Economic News Release, ‘‘Employer Costs for Employee Compensation—December 2022,’’ Table 1. ‘‘Employer Costs for Employee Compensation by ownership [Dec. 2022],’’ https:// www.bls.gov/news.release/archives/ecec_ 03172023.htm (last visited Mar. 21, 2023). 179 See, e.g., 8 CFR 214.2(f)(5)(vi)(A) (describing cap-gap employment) and (f)(11)(ii)(B) (describing OPT and noting that it may be full-time). VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 h. Start Date Flexibility for Certain H– 1B Cap-Subject Petitions DHS proposes to eliminate all the text currently at 8 CFR 214.2(h)(8)(iii)(A)(4), which relates to a limitation on the requested start date, because the current regulatory language is ambiguous. The removal of this text would provide clarity and flexibility to employers with PO 00000 Frm 00067 Fmt 4701 Sfmt 4702 regard to the start date listed on H–1B cap-subject petitions. This clarity may help petitioners by reducing confusion as to what start date they have to put on the petition. In 2020, USCIS implemented the first electronic registration process for the FY 2021 H–1B cap. In that year, and for each subsequent fiscal year, prospective petitioners seeking to file H–1B capsubject petitions (including for beneficiaries eligible for the advanced degree exemption) were required to first electronically register and pay the associated H–1B registration fee for each prospective beneficiary. Because of this DHS only has data for Cap Year 2021 through FY 2023. Table 29 shows the number of cap-subject registrations received and selected by USCIS during Cap Year 2021 through FY 2023. Based on the 3-year annual average DHS estimates that 127,980 registrations are selected each year. DHS cannot estimate the number of petitioners that would benefit from this clarification to the start date on their petition. 180 Calculation: $42.48* 40 hours = $1,699 per week * 26 weeks = $44,174 per 6 months. 181 Calculation: $44,174 per 6 months* 318 (1 percent of 31,834) F–1 students = $14,047,332. 182 Calculation: $44,174 per 6 months* 1,592 (5 percent of 31,834) F–1 students = $70,325,008. E:\FR\FM\23OCP3.SGM 23OCP3 EP23OC23.044</GPH> lotter on DSK11XQN23PROD with PROPOSALS3 2018 2019 2020 2021 2022 5-vear Total 5-vear Annual Average Source: USCIS, OP&S PRD, C3 Mav 4, 2023. 72936 Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules Table 29. H-lB Cap-Subject Registrations Received and Selected by USCIS, Cap Year 2021 through FY 2023 Eligible Registrations for Eligible Registrations Total Number of Beneficiaries for Beneficiaries with Cap Year Registrations Selections with No Other Multiple Eligible Received Eligible Registrations Registrations 2021 274 237 241.299 28.125 124 415 211,304 131 924 2022 308 613 90.143 2023 483,927 309,241 165,180 127,600 3-Year Total 1,066,777 761,844 283,448 383,939 3-Year Average 355,592 253,948 94,483 127,980 Source: https:/lwww.uscis.gov/working-in-the-united-states/temporary-workers/h-1 b-speci alty-occupati ans-andfashion-models/h-1 b-electronic-reRistration-process (Mar. 30, 2023). This proposed change is also a potential cost savings to petitioners who, in the event USCIS cap-subject petitions that were rejected solely due to start date, would no longer need to resubmit their petition(s). i. The H–1B Registration System Through issuance of a final rule in 2019, Registration Requirement for Petitioners Seeking To File H–1B Petitions on Behalf of Cap-Subject Aliens,183 DHS developed a new way to administer the H–1B cap selection process to streamline processing and provide overall cost savings to employers seeking to file H–1B capsubject petitions. In 2020, USCIS implemented the first electronic registration process for the FY 2021 H– 1B cap. In that year, and for each subsequent fiscal year, prospective petitioners seeking to file H–1B capsubject petitions (including for beneficiaries eligible for the advanced degree exemption) were required to first electronically register and pay the associated H–1B registration fee for each prospective beneficiary. When registration is required, an H–1B capsubject petition is not eligible for filing unless it is based on a selected registration that was properly submitted by the prospective petitioner, or their representative, for the beneficiary. Table 30 shows the number of cap registration receipts by year, as well as the number of registrations that were selected to file I–129 H–1B petitions. The number of registrations has increased over the past 3 years. DHS believes that this increase is partially due to the increase in multiple companies submitting registrations for the same beneficiary. USCIS received a low of 274,237 H–1B Cap-Subject Registrations for cap year FY 2021, and a high of 483,927 H–1B Cap-Subject Registrations for cap year 2023. DHS has not included cap year 2024 data into this analysis because such data are incomplete.184 Note* The count of eligible registrations excludes du12licate registrations, those deleted by the nrosnective emnlover nrior to the close of the ree:istration neriod and those with failed navments. DHS estimates the current public reporting time burden for an H–1B Registration is 31 minutes (0.5167 hours), which includes the time for reviewing instructions, gathering the 183 See ‘‘Registration Requirement for Petitioners Seeking To File H–1B Petitions on Behalf of CapSubject Aliens,’’ 84 FR 888 (Jan. 31, 2019). 184 While the initial registration selection process has been completed, DHS is unable to determine at this time how many total petitions will be submitted within the filing period. VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 PO 00000 Frm 00068 Fmt 4701 Sfmt 4702 E:\FR\FM\23OCP3.SGM 23OCP3 EP23OC23.045</GPH> EP23OC23.046</GPH> lotter on DSK11XQN23PROD with PROPOSALS3 Table 30. H-lB Cap-Subject Registrations Received and Selected by USCIS, Cap Year 2021 through FY 2023 Eligible Registrations Total Number of Eligible Registrations H-lB Capfor for Beneficiaries with Cap Year Subject Beneficiaries Selections Multiple Eligible Registrations with No Other Registrations Submitted Eligible Registrations 274,237 124 415 2021 241 299 28 125 308,613 2022 211 304 90 143 131 924 483,927 2023 309 241 165 180 127 600 1,066,777 761,844 283,448 383,939 3-Year Total 355,592 94,483 3-Year Avera2e 253 948 127 980 Source: https:Ilwww.uscis.gov/working-in-the-uni ted-states/temporary-workers/h-1 b-speci altyoccupations-and-fashion-modelslh-1 b-electronic-registration-process Mar. 30, 2023. Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules required information, and submitting the registration. The number of Form G–28 submissions allows USCIS to estimate the number of H–1B registrations that an attorney or accredited representative submits and thus estimate the opportunity costs of time for an attorney or accredited representative to file each form. Table 31 shows the number of Cap-Subject registrations received with and without Form G–28. USCIS received a low of 148,964 Cap-Subject Registrations with Form G–28 in cap year 2022, and a high of 207,053 Cap- 72937 Subject Registrations with Form G–28 in cap year 2023. Based on a 3-year annual average, DHS estimates the annual average receipts of Cap-Subject Registrations to be 171,330 with 48 percent of registrations submitted by an attorney or accredited representative. Table 31. Total Form 1-129 H-lB Cap-Subject Registrations Since the Beginning of the Registration System with and without Form G-28, Cap Year 2021 through Cap Year 2023 Total Number of Percentage of Total Number H-lB CapH-lB CapofH-lB CapTotal ofH-lB Subject Registrations Submitted without Form G-28 Subject Registrations Submitted with Form G-28 Cap-Subject Registrations Submitted 2021 2022 2023 116.264 159,649 276,874 157 973 148 964 207 053 274.237 308,613 483,927 58% 48% 43% 3-Year Total 3-Year Avera2e 552,787 184,262 513,990 171,330 1,066,777 355,592 48% 48% Cap Year Subject Registrations Submitted with Form G28 Source: USCIS Office of Policy and Strategy, PRD CLAIMS3 and ELIS databases, Mar. 30, 2023. 185 USCIS limited its analysis to HR specialists, in-house lawyers, and outsourced lawyers to present estimated costs. However, USCIS understands that not all entities employ individuals with these occupations and, therefore, recognizes equivalent occupations may also prepare and file these petitions or registrations. 186 See BLS, ‘‘Occupational Employment and Wage Statistics, Occupational Employment and Wages, May 2022, 13–1071 Human Resources Specialists,’’ https://www.bls.gov/oes/2022/may/ oes131071.htm (last visited May 11, 2023). 187 See BLS, ‘‘Occupational Employment and Wage Statistics, Occupational Employment and Wages, May 2022, 23–1011 Lawyers,’’ https:// www.bls.gov/oes/2022/may/oes231011.htm (last visited May 11, 2023). VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 benefits-to-wage multiplier is 1.45 and, therefore, is able to estimate the full opportunity cost per petitioner, including employee wages and salaries and the full cost of benefits such as paid leave, insurance, retirement, etc.188 DHS multiplied the average hourly U.S. wage rate for HR specialists and in-house lawyers by 1.45 to account for the full cost of employee benefits, for a total of $50.94 189 per hour for an HR specialist and $114.17 190 per hour for an in-house lawyer. DHS recognizes that a firm may choose, but is not required, to outsource the preparation of these petitions and, therefore, presents two wage rates for lawyers. To determine the full opportunity costs of time if a firm hired an outsourced lawyer, DHS multiplied the average hourly U.S. wage rate for lawyers by 2.5 191 for a total of 188 The benefits-to-wage multiplier is calculated as follows: (Total Employee Compensation per hour)/(Wages and Salaries per hour) ($42.48 Total Employee Compensation per hour)/($29.32 Wages and Salaries per hour) = 1.44884 = 1.45 (rounded). See BLS, Economic News Release, ‘‘Employer Costs for Employee Compensation’’ (Dec. 2022), Table 1. ‘‘Employer Costs for Employee Compensation by ownership’’ (Dec. 2022), https://www.bls.gov/ news.release/archives/ecec_03172023.htm (last visited Mar. 21, 2023). The Employer Costs for Employee Compensation measures the average cost to employers for wages and salaries and benefits per employee hour worked. 189 Calculation: $35.13 * 1.45 = $50.94 total wage rate for HR specialist. 190 Calculation: $78.74 * 1.45 = $114.17 total wage rate for in-house lawyer. 191 The ICE ‘‘Safe-Harbor Procedures for Employers Who Receive a No-Match Letter’’ used a multiplier of 2.5 to convert in-house attorney PO 00000 Frm 00069 Fmt 4701 Sfmt 4702 $196.85 192 to approximate an hourly wage rate for an outsourced lawyer 193 to prepare and submit an H–1B registration.194 wages to the cost of outsourced attorney based on information received in public comment to that rule. We believe the explanation and methodology used in the Final Small Entity Impact Analysis for that rule remains sound for using 2.5 as a multiplier for outsourced labor wages in this proposed rule, see https://www.regulations.gov/document/ICEB2006-0004-0922, at page G–4. 192 Calculation: $78.74 * 2.5 = $196.85 total wage rate for an outsourced lawyer. 193 The DHS analysis in ‘‘Exercise of TimeLimited Authority To Increase the Fiscal Year 2018 Numerical Limitation for the H–2B Temporary Nonagricultural Worker Program,’’ 83 FR 24905 (May 31, 2018), https://www.federalregister.gov/ documents/2018/05/31/2018-11732/exercise-oftime-limited-authority-to-increase-the-fiscal-year2018-numerical-limitation-for-the, used a multiplier of 2.5 to convert in-house attorney wages to the cost of outsourced attorney wages. The DHS Immigration and Customs Enforcement (ICE) rule ‘‘Final Small Entity Impact Analysis: ‘Safe-Harbor Procedures for Employers Who Receive a No-Match Letter’ ’’ at G–4 (Aug. 25, 2008), https:// www.regulations.gov/document/ICEB-2006-00040922, also uses a multiplier. The methodology used in the Final Small Entity Impact Analysis remains sound for using 2.5 as a multiplier for outsourced labor wages in this proposed rule. 194 The DHS analysis in ‘‘Exercise of TimeLimited Authority To Increase the Fiscal Year 2018 Numerical Limitation for the H–2B Temporary Nonagricultural Worker Program,’’ 83 FR 24905 (May 31, 2018), https://www.federalregister.gov/ documents/2018/05/31/2018-11732/exercise-oftime-limited-authority-to-increase-the-fiscal-year2018-numerical-limitation-for-the, used a multiplier of 2.5 to convert in-house attorney wages to the cost of outsourced attorney wages. Also, the analysis for a DHS ICE rule, ‘‘Final Small Entity Impact Analysis: ‘Safe-Harbor Procedures for Employers E:\FR\FM\23OCP3.SGM Continued 23OCP3 EP23OC23.047</GPH> lotter on DSK11XQN23PROD with PROPOSALS3 In order to estimate the opportunity costs of time for completing and filing an H–1B registration DHS assumes that a registrant will use an HR specialist, an in-house lawyer, or an outsourced lawyer to prepare an H–1B registration.185 DHS uses the mean hourly wage of $35.13 for HR specialists to estimate the opportunity cost of the time for preparing and submitting the H–1B registration.186 Additionally, DHS uses the mean hourly wage of $78.74 for in-house lawyers to estimate the opportunity cost of the time for preparing and submitting the H–1B registration.187 DHS accounts for worker benefits when estimating the total costs of compensation by calculating a benefitsto-wage multiplier using the BLS report detailing the average employer costs for employee compensation for all civilian workers in major occupational groups and industries. DHS estimates that the 72938 Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules Table 32 displays the estimated annual opportunity cost of time for submitting an H–1B registration employing an in-house or outsourced lawyer to complete and submit an H–1B registration. DHS does not know the using an attorney or other representative are estimated to range from $10,107,038 to $17,426,385 with an average of $13,766,712. exact number of registrants who will choose an in-house or an outsourced lawyer but assumes it may be a 50/50 split and therefore provides an average. These current opportunity costs of time for submitting an H–1B registration Table 32. Current Average Opportunity Costs of Time for Submitting an H-lB Registration with an Attorney or Other Representative Time Burden to Total Population Current Complete H-lB Submitting with a Cost of Time Registration Opportunity Lawyer (Hours) Cost D=(AxBxC) A B C $10,107 038 In-house lawver 171 330 0.5167 $114.17 Outsourced 171,330 0.5167 $196.85 $17,426,385 lawver $13,766,712 Averae:e Source: USCIS Analvsis To estimate the current remaining opportunity cost of time for an HR specialist submitting an H–1B registration without a lawyer, DHS applies the estimated public reporting time burden (0.5167 hours) to the compensation rate of an HR specialist. Table 33 estimates the current total annual opportunity cost of time to HR specialists completing and submitting an H–1B registration will be approximately $4,849,904. A Time Burden to Complete H-lB Registration (Hours) B 184,262 0.5167 Population lotter on DSK11XQN23PROD with PROPOSALS3 Estimate of H- lB Registrations Source: USCIS Analysis HR Specialist's Opportunity Cost of time Total Opportunity Cost of Time C D=(AxBxC) $50.94 $4,849,904 Table 34 shows the proposed estimated time burden will increase by 5 minutes to 36 minutes (0.6 hours) to the eligible population and compensation rates of those who may submit registrations with or without a lawyer due to changes in the instructions, adding clarifying language regarding denying or revoking approved H–1B petitions, adding passport instructional language, and adding verification before submitting instructions. DHS does not know the exact number of registrants who will choose an in-house or an outsourced lawyer but assumes it may be a 50/50 split and therefore provides an average. DHS estimates that these current opportunity costs of time for submitting an H–1B registration using an attorney or other representative range from $11,736,448 to $20,235,786 with an average of $15,986,117. Who Receive a No-Match Letter’ ’’ at G–4 (Aug. 25, 2008), https://www.regulations.gov/document/ ICEB-2006-0004-0922, used a multiplier. The methodology used in the Final Small Entity Impact Analysis remains sound for using 2.5 as a multiplier for outsourced labor wages in this proposed rule. VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 PO 00000 Frm 00070 Fmt 4701 Sfmt 4702 E:\FR\FM\23OCP3.SGM 23OCP3 EP23OC23.048</GPH> EP23OC23.049</GPH> Table 33. Current Average Opportunity Costs of Time for Submitting an H-lB Re2istration, without an Attornev or Accredited Representative Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules 72939 Table 34. New Opportunity Costs of Time for an H-lB Registration, Petitioners Submitting with an Attornev or Other Reoresentative Population of Time Burden to Total Petitioners Complete FH-lB Cost of Time Opportunity Submitting with Registration Cost (Hours) a Lawver D=(AxBxC) A B C $11 736,448 171 330 0.6 $114.17 In House Lawver Outsourced 171,330 0.6 $196.85 $20,235,786 Lawver $15,986,117 Average Source: USCIS Analvsis To estimate the current remaining opportunity cost of time for an HR specialist submitting an H–1B registration without a lawyer, DHS applies the proposed estimated public reporting time burden (0.6 hours) to the compensation rate of an HR specialist. Table 35 estimates the current total annual opportunity cost of time to HR specialists completing and submitting the H–1B registration will be approximately $5,631,784. Table 35. Proposed Average Opportunity Costs of Time for an H-lB Registration, Submittin2 without an Attorney or Accredited Re ~resentative A Time Burden to Complete H-lB Registration (Hours) B HR Specialist's Opportunity Cost of time (48.40 /hr.) C D=(AxBxC) 184,262 0.6 $50.94 $5,631,784 DHS estimates the total additional annual cost to petitioners completing and filing Form I–129 H–1B are expected to be $3,001,285 shown in Table 36. This table shows the current total opportunity cost of time to submit Table 36. Total Costs to Complete the H-lB Registration Average Current Opportunity Cost Time for Lawyers to Complete the H-lB Registration Average Current Opportunity Cost Time for HR Specialist to Complete the H-lB Registration Total lotter on DSK11XQN23PROD with PROPOSALS3 Average Proposed Opportunity Cost Time for Lawyers to Complete the H-lB Registration Average Proposed Opportunity Cost Time for HR Specialist to Complete the H-lB Registration Total Proposed Additional Opportunity Costs of Time to Complete the H-lB Registration Source: USCIS Analysis VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 PO 00000 Frm 00071 Fmt 4701 Sfmt 4725 an H–1B registration and the proposed total opportunity cost of time. $13,766,712 $4,849,904 $18,616,616 $15,986,117 $5,631,784 $21,617,901 $3,001,285 E:\FR\FM\23OCP3.SGM 23OCP3 EP23OC23.052</GPH> Estimate H- lB Registration Source: USCIS Analysis Total Opportunity Cost of Time EP23OC23.050</GPH> EP23OC23.051</GPH> Population 72940 Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules j. Beneficiary Centric Selection Under the proposed provision, DHS would modify the random selection process. Registrants would continue to submit registrations on behalf of beneficiaries, and beneficiaries would continue to be able to have more than one registration submitted on their behalf, as generally allowed by applicable regulations. If a random selection were necessary (meaning, more registrations are submitted than the number of registrations USCIS projected as needed to reach the numerical allocations), then the random selection would be based on each unique beneficiary identified in the registration pool, rather than each registration. If a beneficiary is selected, then all registrants who properly submitted a registration for that selected beneficiary would be notified of the selection and that they are eligible to file an H–1B cap petition on behalf of the beneficiary during the applicable petition filing period. DHS believes that changing how USCIS conducts the selection process to select by unique beneficiaries instead of registrations would give each unique beneficiary an equal chance at selection and would reduce the advantage that beneficiaries with multiple registrations submitted on their behalf have over beneficiaries with a single registration submitted on their behalf. DHS believes that it would also reduce the incentive that registrants may have to work with others to submit registrations for the same beneficiary to unfairly increase the chance of selection for the beneficiary because doing so under the beneficiarycentric selection approach would not result in an increase in the odds of selection. Selecting by unique beneficiary could also result in other benefits, such as giving beneficiaries greater autonomy regarding their H–1B employment and improving the chances of selection for legitimate registrations. Because the integrity of the new selection process would rely on USCIS’s ability to accurately identify each individual beneficiary, and all registrations submitted on their behalf, DHS proposes to require the submission of valid passport information, including the passport number, country of issuance, and expiration date, in addition to the currently required information. See proposed 8 CFR 214.2(h)(8)(iii)(A)(4)(ii). While the proposed passport requirement could impact individuals who do not yet hold passports at the time of registration, DHS has determined the described benefits of program integrity outweigh any additional burden to prospective beneficiaries. DHS invites public comment on the proposed passport requirement. DHS estimates that the annual average receipts of H–1B registrations is 355,592 with 71 percent of registrations being submitted for a beneficiary with only a single registration. DHS estimates that 29 percent 195 of registrations are submitted by companies for beneficiaries who have also had other registrations submitted on their behalf. Based on this new provision DHS estimates that there may be a reduction in registrations because beneficiaries will be less inclined to find as many different employers to submit registrations on their behalf as doing so would not affect their chance of selection. Also, DHS expects to see less abuse by unscrupulous registrants as they would not be able to increase the chance of selection for a beneficiary by working together with others to submit multiple registrations for the same beneficiary. DHS estimates that 73,501 196 registrations annually may no longer be submitted due to this proposed change. Of those 73,501 registrations, DHS estimated that an attorney or accredited representative submitted 48 percent of registrations and an HR representative submitted the remaining 52 percent shown in Table 31. Table 38 displays the estimated annual opportunity cost of time for submitting an H–1B registration employing an in-house or outsourced lawyer to complete and submit an H–1B registration. DHS does not know the exact number of prospective petitioners who will choose an in-house or an outsourced lawyer but assumes it may be a 50/50 split and therefore provides an average. DHS estimates that these current opportunity costs of time for submitting an H–1B registration using an attorney or other representative range from $2,081,225 to $3,588,413, with an average of $2,834,819. 195 Calculation: 100%¥71% Registrations for a single beneficiary = 29% Registrations submitted for multiple beneficiaries. 196 Calculation: Total Registrations 355,592— Total number of unique beneficiaries with registrations submitted on their behalf 282,091 = 73,501 Estimate of registrations that may no longer be submitted. VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 PO 00000 Frm 00072 Fmt 4701 Sfmt 4702 E:\FR\FM\23OCP3.SGM 23OCP3 EP23OC23.053</GPH> lotter on DSK11XQN23PROD with PROPOSALS3 Table 37. H-lB Cap-Subject Registrations Received by USCIS for Unique Beneficiaries, Cap Year 2021 throu2:h 2023 Total number Total number Total number of of of unique % of Total registrations registrations beneficiaries Total Registrations Cap Year submitted for submitted for with Registrations with Single beneficiaries beneficiaries registrations Beneficiary with multiple with a single submitted on re!!istrations re!!istration their behalf 2021 274,237 34,349 239,888 253,331 87% 2022 308 613 98.547 210 066 235720 68% 2023 483,927 176,444 307,483 357,222 64% 309,340 71% 3-vear Total 1.066.777 757.437 846.273 3-year 71% Annual 355,592 103,113 252,479 282,091 Avera2:e Source: USCIS Office of Performance and Quality Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules 72941 Table 38. Current Annual Average Opportunity Costs of Time for Submitting an H-lB Re2istration, with an Attornev or Other Renresentative Population of Time Burden to Total Current Registrants Complete H-lB Cost of Time Submitting with Registration Opportunity (Hours) a Lawver Cost D=(AxBxC) A B C In House Lawver 35,280 0.5167 $114.17 $2,081,225 Outsourced 35,280 0.5167 $196.85 $3,588,413 Lawver $2,834,819 Avera2e Source: USCIS Analvsis To estimate the current remaining opportunity cost of time for an HR specialist submitting an H–1B registration without a lawyer, DHS applies the estimated public reporting time burden (0.5167 hours) to the compensation rate of an HR specialist. Table 39 estimates the current total annual opportunity cost of time to HR specialists completing and submitting an H–1B registration will be approximately $1,006,003. Table 39. Current Annual Average Opportunity Costs of Time for Submitting an H-lB Re2istration, without an Attornev or Accredited Renresentative Time Burden to HR Specialist's Total Complete H-lB Population Opportunity Cost Opportunity Registration of time Cost of Time (Hours) D=(AxBxC) A B C Estimate of H- lB 38,221 0.5167 $50.94 $1,006,003 Registrations Source: USCIS Analysis DHS estimates the total annual opportunity cost savings of time for not having to complete and submit H–1B registrations for beneficiaries with multiple registrations are expected to be $3,840,822, shown in Table 40. Table 40. Total Annual Onnortunitv Cost Savin2s of Time for H-lB Re2istrations Average Current Opportunity Cost Time for $2,834,819 Lawyers to Complete H-lB Registration Average Current Opportunity Cost Time for HR Specialist to Complete H-lB Registration $1,006,003 annual total cost savings of this proposed beneficiary centric selection is $4,575,832.197 Table 41. Total Annual Cost Savings for Registration Fees Annual Registrations for the same beneficiaries Registration Fee Total Cost savin2s Source: USCIS Analysis 197 Calculation: Total Opportunity Cost Savings of time for H–1B Registrations ($3,840,822) + Total VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 73,501 $10 $735,010 Cost Savings for Registration Fees ($735,010) = $4,575,832 Total Cost Savings. PO 00000 Frm 00073 Fmt 4701 Sfmt 4725 E:\FR\FM\23OCP3.SGM 23OCP3 EP23OC23.056</GPH> associated $10 H–1B registration fee for each prospective beneficiary. Due to this proposed change DHS estimates that prospective petitioners may now see an additional cost savings of $735,010. The EP23OC23.054</GPH> EP23OC23.055</GPH> lotter on DSK11XQN23PROD with PROPOSALS3 Prospective petitioners seeking to file H–1B cap-subject petitions, including for beneficiaries eligible for the advanced degree exemption, must first electronically register and pay the EP23OC23.057</GPH> $3,840,822 Total Source: USCIS Analvsis 72942 Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules k. Bar on Multiple Registrations Submitted by Related Entities lotter on DSK11XQN23PROD with PROPOSALS3 DHS regulations already preclude the filing of multiple H–1B cap-subject petitions by related entities for the same beneficiary unless the related petitioners can establish a legitimate business need for filing multiple capsubject petitions for the same beneficiary. DHS is not proposing to change this in the current regulation. Rather, DHS is proposing to extend a similar limitation to the submission of registrations by related entities. See proposed 8 CFR 214.2(h)(2)(i)(G). When an employer submits a registration, they attest that they intend to file a petition based on that registration and that there is a legitimate job offer. To allow related employers to submit registrations without a legitimate business need, but not allow them to file petitions without a legitimate business need, creates an inconsistency between the antecedent procedural step of registration and the petition filing. Extending the bar on multiple petition filings by related entities to multiple registration submissions by related entities for the same cap-subject beneficiary would harmonize the expectations for petition filing and registration submission. While the proposed changes to the beneficiary centric selection are intended to reduce frivolous registrations, DHS cannot guarantee with certainty that such change would eliminate entities from working with each other to submit registrations to unfairly increase chances of selection for a beneficiary by submitting slightly different identifying information or other means. Therefore, this provision may serve as an additional deterrent to further reduce the incentive for companies filing multiple registrations to have a higher chance of selection. This change may benefit petitioners whose chances of selection have been negatively affected by companies filing multiple registrations to increase the chances of selection. DHS cannot estimate the number of petitioners that this provision may benefit, because DHS cannot accurately measure how many petitioners are not submitting legitimate registrations or filing legitimate petitions in this manner. l. Registrations With False Information or That Are Otherwise Invalid Although registration is an antecedent procedural step undertaken prior to filing an H–1B cap-subject petition, the validity of the registration information is key to the registrant’s eligibility to file a petition. As stated in the current regulations, ‘‘[t]o be eligible to file a VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 petition for a beneficiary who may be counted against the H–1B regular cap or the H–1B advanced degree exemption for a particular fiscal year, a registration must be properly submitted in accordance with 8 CFR 103.2(a)(1), [8 CFR 214.2(h)(8)(iii),] and the form instructions.’’ See 8 CFR 214.2(h)(8)(iii)(A)(1). USCIS does not consider a registration to be properly submitted if the information contained in the registration, including the required attestations, was not true and correct. Currently, the regulations state that it is grounds for denial or revocation if the statements of facts contained in the petition are not true and correct, inaccurate, fraudulent, or misrepresented a material fact. DHS proposes to clarify in the regulations that the grounds for denial of an H–1B petition or revocation of an H–1B petition approval extend to the information provided in the registration and to expressly state in the regulations that this includes attestations on the registration that are determined by USCIS to be false. DHS is also proposing changes to the regulations governing registration that would provide USCIS with clearer authority to deny or revoke the approval of a petition based on a registration that was not properly submitted or was otherwise invalid. Specifically, DHS is proposing to add that if a petitioner submits more than one registration per beneficiary in the same fiscal year, all registrations filed by that petitioner relating to that beneficiary for that fiscal year may be considered not only invalid, but that ‘‘USCIS may deny or revoke the approval of any petition filed for the beneficiary based on those registrations.’’ Additionally, DHS is proposing to add that USCIS may deny or revoke the approval of an H–1B petition if it determines that the fee associated with the registration is declined, not reconciled, disputed, or otherwise invalid after submission. These proposed changes may increase the need for RFEs and NOIDs. It is important to note that issuing RFEs and NOIDs takes time and effort for adjudicators—to send, receive, and adjudicate documentation—and it requires additional time and effort for petitioners to respond, resulting in extended timelines for adjudications.198 198 The regulations state that when an RFE is served by mail, the response is timely filed if it is received no more than 3 days after the deadline, providing a total of 87 days for a response to be submitted if USCIS provides the maximum period of 84 days under the regulations. The maximum response time for a NOID is 30 days. See https:// PO 00000 Frm 00074 Fmt 4701 Sfmt 4702 Data on RFEs and NOIDs related to H– 1B false information are not standardized or tracked in a consistent way, thus they are not accurate or reliable. m. Provisions To Ensure Bona Fide Job Offer for a Specialty Occupation Position (1) Contracts DHS proposes to codify USCIS’ authority to request contracts, work orders, or similar evidence. See proposed 8 CFR 214.2(h)(4)(iv)(C). Such evidence may take the form of contracts or legal agreements, if available, or other evidence including technical documentation, milestone tables, or statements of work. Evidence submitted should show the contractual relationship between all parties, the terms and conditions of the beneficiary’s work, and the minimum educational requirements to perform the duties. While USCIS already has the authority to request contracts and other similar evidence, the regulations do not state this authority. By proposing to codify this authority, USCIS is putting stakeholders on notice of the kinds of evidence that could be requested to establish the terms and conditions of the beneficiary’s work and the minimum educational requirements to perform the duties. This evidence, in turn, could establish that the petitioner has a bona fide job offer for a specialty occupation position for the beneficiary. Relative to the no action baseline, this change has no costs associated with it, and there may be transparency benefits due to this proposed change. Relative to the pre policy baseline petitioners may have taken time to find contracts or legal agreements, if available, or other evidence including technical documentation, milestone tables, or statements of work. DHS cannot estimate how much time it would have taken for petitioners to provide that information. (2) Non-Speculative Employment DHS proposes to codify its requirement that the petitioner must establish, at the time of filing, that it has a non-speculative position in a specialty occupation available for the beneficiary as of the start date of the validity period as requested on the petition. See proposed 8 CFR 214.2(h)(4)(iv)(D). This change is consistent with current DHS policy guidance that an H–1B petitioner must establish that employment exists at the time of filing the petition and that www.uscis.gov/policy-manual/volume-1-part-echapter-6. E:\FR\FM\23OCP3.SGM 23OCP3 Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules it may employ the beneficiary in a specialty occupation.199 Relative to the no action baseline, this change has no costs associated with it, and there may be transparency benefits due to this proposed change. Relative to the pre policy baseline petitioners may require time to provide documentation to establish that their position was a nonspeculative position in a specialty occupation. DHS cannot estimate how much time it takes for petitioners to provide that information. (3) LCA Corresponds With the Petition DHS is proposing to update the regulations to expressly include DHS’s existing authority to ensure that the LCA properly supports and corresponds with the accompanying H–1B petition. Relative to the no action baseline, this change has no costs and may yield transparency benefits due to consistency between regulation and current policy. Relative to the pre policy baseline petitioners may have taken time to provide their LCA to DHS, however DHS cannot estimate how much time it would have taken for petitioners to provide that information. lotter on DSK11XQN23PROD with PROPOSALS3 (4) Revising the Definition of U.S. Employer DHS is proposing to revise the definition of ‘‘United States employer.’’ First, DHS proposes to eliminate the employer-employee relationship requirement. In place of the employeremployee relationship requirement, DHS proposes to codify the requirement that the petitioner has a bona fide job offer for the beneficiary to work, which may include telework, remote work, or other off-site work within the United States. DHS also proposes to replace the requirement that the petitioner ‘‘[e]ngages a person to work within the United States’’ with the requirement that the petitioner have a legal presence and is amenable to service of process in the United States. Relative to the no action baseline, this change has no costs associated with it, and there may be transparency benefits due to this proposed change. Relative to the pre policy baseline, petitioners may require time to provide documentation establishing a bona fide job offer for the beneficiary to work. DHS cannot estimate how much time petitioners take to provide that information. 199 See USCIS, ‘‘Rescission of Policy Memoranda,’’ PM–602–0114 (June 17, 2020) (citing Matter of Chawathe, 25 I&N Dec. 369 (AAO 2010)). VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 (5) Employer-Employee Relationship DHS proposes to eliminate the employer-employee relationship requirement, which, in the past, has been a significant barrier to the H–1B program for certain petitioners, including beneficiary-owned petitioners. This proposed change would benefit petitioners because it may decrease confusion and increase clarity for stakeholders. Relative to the no action baseline, this change has no costs associated with it, and there may be transparency benefits due to this proposed change. Relative to the pre policy baseline petitioners may have taken time to understand the change. n. Beneficiary-Owners DHS proposes to codify a petitioner’s ability to qualify as a U.S. employer even when the beneficiary possesses a controlling interest in that petitioner. To promote access to H–1Bs for entrepreneurs, start-up entities, and other beneficiary-owned businesses, DHS is proposing to add provisions to specifically address situations where a potential H–1B beneficiary owns a controlling interest in the petitioning entity. If more entrepreneurs are able to obtain H–1B status to develop their business enterprise, the United States could benefit from the creation of jobs, new industries, and new opportunities.200 This proposed change would benefit H–1B petitions filed by start-up entities and other beneficiaryowned businesses, or filed on behalf of entrepreneurs who have a controlling interest in the petitioning entity. DHS is unable to estimate how many petitioners would benefit from this proposed change. DHS is also proposing to limit the validity period for beneficiary-owned entities. DHS proposes to limit the validity period for the initial petition and first extension (including an 200 See, e.g., National Bureau of Economic Research, ‘‘Winning the H–1B Visa Lottery Boosts the Fortunes of Startups’’ (Jan. 2020), https:// www.nber.org/digest/jan20/winning-h-1b-visalottery-boosts-fortunes-startups (‘‘The opportunity to hire specialized foreign workers gives startups a leg up over their competitors who do not obtain visas for desired employees. High-skilled foreign labor boosts a firm’s chance of obtaining venture capital funding, of successfully going public or being acquired, and of making innovative breakthroughs.’’). Pierre Azoulay, et. al, ‘‘Immigration and Entrepreneurship in the United States’’ (National Bureau of Economic Research, Working Paper 27778 (Sept. 2020) https:// www.nber.org/system/files/working_papers/ w27778/w27778.pdf (‘‘immigrants act more as ‘job creators’ than ‘job takers’ and . . . non-U.S. born founders play outsized roles in U.S. high-growth entrepreneurship’’). PO 00000 Frm 00075 Fmt 4701 Sfmt 4702 72943 amended petition with a request for an extension of stay) of such a petition to 18 months. See proposed 8 CFR 214.2(h)(9)(iii)(E). Any subsequent extension would not be limited and may be approved for up to 3 years, assuming the petition satisfies all other H–1B requirements. DHS proposes limiting the first two validity periods to 18 months as a safeguard against possible fraudulent petitions. While DHS sees a significant advantage in promoting the H–1B program to entrepreneurs and allowing these beneficiaries to perform a significant amount of non-specialty occupation duties, unscrupulous petitioners might abuse such provisions without sufficient guardrails. DHS believes that there may be a cost to petitioners associated with this change however cannot estimate how many petitioners may be affected by limiting the validity period. o. Site Visits USCIS conducts inspections, evaluations, verifications, and compliance reviews, to ensure that a petitioner and beneficiary are eligible for the benefit sought and that all laws have been complied with before and after approval of such benefits. These inspections, verifications, and other compliance reviews may be conducted telephonically or electronically, as well as through physical on-site inspections (site visits). DHS is proposing to add regulations specific to the H–1B program to codify its existing authority and clarify the scope of inspections and the consequences of a petitioner’s or third party’s refusal or failure to fully cooperate with these inspections. Currently, site visit inspections are not mandatory for petitioners filing Form I– 129 on behalf of H–1B specialty occupation nonimmigrant workers. Using its general authority, USCIS may conduct audits, on-site inspections, reviews, or investigations to ensure that a beneficiary is entitled to the benefits sought and that all laws have been complied with before and after approval of such benefits.201 The authority to conduct on-site inspection is critical to the integrity of the H–1B program to detect and deter fraud and noncompliance. 201 See INA section 103 and 8 CFR 2.1. As stated in subsection V.A.5.ii(d) of this analysis, regulation would also clarify the possible scope of an inspection, which may include the petitioning organization’s headquarters, satellite locations, or the location where the beneficiary works or will work, including third-party worksites, as applicable. E:\FR\FM\23OCP3.SGM 23OCP3 72944 Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules lotter on DSK11XQN23PROD with PROPOSALS3 In July 2009, USCIS started the Administrative Site Visit and Verification Program 202 as an additional method to verify information in certain visa petitions under scrutiny. Under this program, FDNS officers are authorized to make unannounced site visits to collect information as part of a compliance review, which verifies whether petitioners and beneficiaries are following the immigration laws and regulations that are applicable in a particular case. This process includes researching information in government databases, reviewing public records and evidence accompanying the petition, interviewing the petitioner or beneficiary, and conducting site visits. Once the FDNS officers complete the site visit, they write a Compliance Review Report for any indicators of fraud or noncompliance to assist USCIS in final adjudicative decisions. The site visits conducted under USCIS’s existent, general authority, and thus part of the baseline against which this proposed rule’s impact should be measured, have uncovered a significant amount of noncompliance in the H–1B program.203 Further, when disaggregated by worksite location, the noncompliance rate was found to be higher for workers placed at an off-site or third-party location compared to workers placed at a petitioner’s on-site location.204 As a result, USCIS began conducting more targeted site visits related to the H–1B program, focusing on the cases of H–1B dependent employers (i.e., employers who have a high ratio of H–1B workers compared to U.S. workers, as defined by statute) for whom USCIS cannot validate the employer’s basic business information through commercially available data, and on employers petitioning for H–1B workers who work off-site at another company or organization’s location. DHS believes that site visits are important to maintain the integrity of 202 See USCIS, ‘‘Administrative Site Visit and Verification Program,’’ https://www.uscis.gov/ about-us/directorates-and-program-offices/frauddetection-and-national-security/administrative-sitevisit-and-verification-program (last visited Sept. 18, 2019). See USCIS, ‘‘Administrative Site Visit and Verification Program,’’ https://www.uscis.gov/ about-us/directorates-and-program-offices/frauddetection-and-national-security/administrative-sitevisit-and-verification-program (last visited Sept. 18, 2019). See USCIS, ‘‘Administrative Site Visit and Verification Program,’’ https://www.uscis.gov/ about-us/directorates-and-program-offices/frauddetection-and-national-security/administrative-sitevisit-and-verification-program https:// www.uscis.gov/about-us/directorates-and-programoffices/fraud-detection-and-national-security/ administrative-site-visit-and-verification-program (last visited Sept. 18, 2019). 203 USCIS, Office of Policy and Strategy, PRD, Summary of H–1B Site Visits Data. 204 Id. VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 the H–1B program to detect and deter fraud and noncompliance in the H–1B program, which in turn ensures the appropriate use of the H–1B program and the protection of the interests of U.S. workers. These site visits would continue in the absence of this proposed rule and DHS notes that current Form I– 129 instructions notify petitioners of USCIS’ legal authority to verify information before or after a case decision, including by means of unannounced physical site inspection. Hence, DHS is proposing additional requirements specific to the H–1B program to set forth the scope of on-site inspections, and the consequences of a petitioner’s or third party’s refusal or failure to fully cooperate with existing inspections. DHS does not foresee the rule leading to more on-site inspections. This proposed rule would provide a clear disincentive for petitioners that do not cooperate with compliance reviews and inspections while giving USCIS greater authority to access and confirm information about employers and workers as well as identify fraud. The proposed regulations would make clear that inspections may include, but are not limited to, an on-site visit of the petitioning organization’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 USCIS may lawfully obtain and that it considers pertinent to verify facts related to the adjudication of the petition, such as facts relating to the petitioner’s and beneficiary’s eligibility and continued compliance with the requirements of the H–1B program. See proposed 8 CFR 214.2(h)(4)(i)(B)(2). The proposed regulation would also clarify that an inspection may take place at the petitioning organization’s headquarters, satellite locations, or the location where the beneficiary works or will work, including third-party worksites, as applicable. The proposed provisions would make clear that an H–1B petitioner or any employer must allow access to all sites where the labor will be performed for the purpose of determining compliance with applicable H–1B requirements. The proposed regulation would state the consequences if USCIS is unable to verify facts related to an H–1B petition due to the failure or refusal of the petitioner or a third-party worksite to cooperate with a site visit. These failures or refusals may be grounds for denial or revocation of any H–1B petition related to locations that are a subject of inspection, including any third-party worksites. See proposed 8 CFR 214.2(h)(4)(i)(B)(2). PO 00000 Frm 00076 Fmt 4701 Sfmt 4702 In order to estimate the population impacted by site visits, DHS uses site inspection data used to verify facts pertaining to the H–1B petition adjudication process. The site inspections were conducted at H–1B petitioners’ on-site locations and thirdparty worksites during FY 2018 through FY 2022. For instance, from FY 2019 through FY 2022, USCIS conducted a total of 27,062 H–1B compliance reviews and found 5,037 of them, equal to 19 percent, to be noncompliant or indicative of fraud.205 These compliance reviews (from FY 2019 through FY 2022) consisted of reviews conducted under both the Administrative Site Visit and Verification Program and the Targeted Site Visit and Verification Program, which began in 2017. The targeted site visit program allows USCIS to focus resources where fraud and abuse of the H–1B program may be more likely to occur.206 Table 42 shows the number of H–1B worksite inspections conducted each year and the number of visits that resulted in compliance and noncompliance. USCIS received a low of 1,057 fraudulent/noncompliant cases in FY 2022, and a high of 1,469 fraudulent/noncompliant cases in FY 2021. DHS estimates that, on average, USCIS conducted 6,766 H–1B worksite inspections annually from FY 2019 through FY 2022 and of those DHS finds a noncompliance rate of 19 percent. Assuming USCIS continues worksite inspections at the 4-year annual average rate, the population impacted by this proposed provision would be 1,259 or 19 percent of H–1B petitioners visited who are found noncompliant or indicative of fraud. The outcomes of site visits under the proposed rule are indeterminate as currently noncooperative petitioners might be found to be fully compliant, might continue to not cooperate with site visits despite penalties, or might be forced to reveal fraudulent practices to USCIS. The expected increase in cooperation from current levels would be the most important impact of the proposed provision, which DHS discusses below. DHS notes that the increased cooperation might come disproportionately from site visits of third-party worksites that did not sign Form I–129 attesting to permit 205 DHS, USCIS, PRD (2022). PRD196. USCIS conducted these site visits through its Administrative and Targeted Site Visit Programs. 206 See USCIS, ‘‘Putting American Workers First: USCIS Announces Further Measures to Detect H– 1B Visa Fraud and Abuse,’’ (April 3, 2017), https:// www.uscis.gov/archive/putting-american-workersfirst-uscis-announces-further-measures-to-detect-h1b-visa-fraud-and-abuse. E:\FR\FM\23OCP3.SGM 23OCP3 Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules unannounced physical site inspections 72945 of residences and places of employment by USCIS. Table 42. H-lB Compliance and Fraud/Noncompliance Percentages Closed by FDNS Overall, FY 2019 throu2h FY 2022 Percent of Fiscal Year Compliant Fraud/Noncompliant Total Fraud/Noncompliance 2019 7,891 1,431 9,322 15% 2020 4,063 1,080 5,143 21% 2021 5,413 1,469 6,882 21% 2022 4,658 1,057 5,715 18% 19% 4-vear Total 22,025 5,037 27,062 4-year 19% Annual 5,506 1,259 6,766 Avera2e Source: USCIS Fraud Detection and National Securitv (FDNS) Jan. 23 2023 Table 43 shows the average duration of time to complete each inspection was 1.08 hours. Therefore, DHS assumes that USCIS would continue to conduct the same number of annual worksite inspections (7,252), on average, and that the average duration of time for a USCIS immigration officer to conduct each worksite inspection would be an average of 1.08 hours. The data in Table 42 and Table 43 differ slightly based on the different search criteria, pull dates and systems accessed. DHS also assumes that the average duration of time of 1.08 hours to conduct an inspection covers the entire inspection process, which includes interviewing the beneficiary, the on-site supervisor or manager and other workers, as applicable, and reviewing all records pertinent to the H–1B petitions available to USCIS when requested during inspection. Table 43. Total Number of Worksite Inspections Conducted for H-lB Petitioners and Average Inspection Time, FY 2018 to FY 2022. Average Duration for Worksite Inspection (Hours) 2018 7,718 1.16 2019 10,384 1.23 2020 5,826 1.12 2021 6,780 0.86 2022 5,550 1.05 5-year Total 36,258 5.42 7,252 5-year A vera2e 1.08 Source: USCIS, Fraud Detection and National Security (FDNS). Apr. 12, 2023 Number of Worksite Inspections DHS assumes that a supervisor or manager, in addition to the beneficiary, would be present on behalf of a petitioner while a USCIS immigration officer conducts the worksite inspection. The officer would interview the beneficiary to verify the date employment started, work location, hours, salary, and duties performed to corroborate with the information provided in an approved petition. The supervisor or manager would be the most qualified employee at the location who could answer all questions pertinent to the petitioning organization and its H–1B nonimmigrant workers. They would also be able to provide the proper records available to USCIS immigration officers. Consequently, for the purposes of this economic analysis, VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 DHS assumes that on average two individuals would be interviewed during each worksite inspection: the beneficiary and the supervisor or manager. DHS uses their respective compensation rates in the estimation of the worksite inspection costs.207 However, if any other worker or on-site manager is interviewed, the same compensation rates would apply. DHS uses hourly compensation rates to estimate the opportunity cost of time a beneficiary and supervisor or manager 207 DHS does not estimate any other USCIS costs associated with the worksite inspections (i.e., travel and deskwork relating to other research, review and document write up) here because these costs are covered by fees collected from petitioners filing Form I–129 for H–1B petitions. All such costs are reported under the Federal Government Cost section. PO 00000 Frm 00077 Fmt 4701 Sfmt 4702 would incur during worksite inspections. Based on data obtained from a USCIS report in 2022, DHS estimates that an H–1B worker earned an average of $116,000 per year in FY 2021.208 DHS therefore estimates the salary of an H–1B worker is 208 This is the annual average earning of all H– 1B nonimmigrant workers in all industries with known occupations (excluding industries with unknown occupations) for FY 2021. It is what employers agreed to pay the nonimmigrant workers at the time the applications were filed and estimated based on full-time employment for 12 months, even if the nonimmigrant worker worked fewer than 12 months. USCIS, ‘‘Characteristics of H–1B Specialty Occupation Workers, Fiscal Year 2021 Annual Report to Congress, October 1, 2020– September 30, 2021,’’ at 16, Table 9a (Mar. 2, 2022), https://www.uscis.gov/sites/default/files/document/ data/H1B_Characteristics_Congressional_Report_ FY2021-3.2.22.pdf. E:\FR\FM\23OCP3.SGM 23OCP3 EP23OC23.058</GPH> EP23OC23.059</GPH> lotter on DSK11XQN23PROD with PROPOSALS3 Fiscal Year 72946 Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules approximately $116,000 annually, or $55.77 hourly wage.209 The annual salary does not include noncash compensation and benefits, such as health insurance and transportation. DHS adjusts the average hourly wage rate using a benefits-to-wage multiplier to estimate the average hourly compensation of $ 80.87 for an H–1B nonimmigrant worker.210 In order to estimate the opportunity cost of time they would incur during a worksite inspection, DHS uses an average hourly compensation rate of $91.47 per hour for a supervisor or manager, where the average hourly wage is $63.08 per hour worked and average benefits are $28.39.211 While the average duration of time to conduct an inspection is estimated at 1.08 hours in this analysis, DHS is not able to estimate the average duration of time for a USCIS immigration officer to conduct an interview with a beneficiary or supervisor or manager. In the absence of this information, DHS assumes that it would on average take 0.54 hours to interview a beneficiary and 0.54 hours to interview a supervisor or manager.212 In Table 44, DHS estimates the total annual opportunity cost of time for worksite inspections of H–1B petitions by multiplying the average annual number of worksite inspections (7,252) by the average duration the interview would take for a beneficiary or supervisor or manager and their respective compensation rates. DHS obtains the total annual cost of the H– 1B worksite inspections to be $674,881 for this proposed rule. Table 44. Form 1-129 Petitioners' Annual Cost of Worksite Insnection for H-lB Workers Number of Average Worksite Compensation Duration of Total Cost Cost Item Inspections Interview Rate (Annual (Hours) Average) D=AxBxC A B C Beneficiaries' opportunity cost of time during worksite 7,252 0.54 $80.87 $316,693 inspections Supervisors or managers' 7,252 0.54 $91.47 $358,188 opportunity cost of time during worksite inspections $674,881 Total 1.08 Source: USCIS analvsis - This proposed change may affect employers who do not cooperate with site visits who would face denial or revocation of their petition(s), which could result in costs to those businesses. Petitioners may face financial losses because they may lose access to labor for extended periods, which could result in too few workers, loss of revenue, and some could go out of business. DHS expects program participants to comply with program requirements, however, and notes that those that do not could experience significant impacts due to this proposed rule. DHS expects that the proposed rule would hold certain petitioners more accountable for violations, including certain findings of labor law and other violations, and would prevent registrations with false information from taking a cap number for which they are ineligible. In this proposed provision, in certain circumstances USCIS would look at the third party’s requirements for the beneficiary’s position, rather than the petitioner’s stated requirements, in assessing whether the proffered position qualifies as a specialty occupation. As required by both INA section 214(i)(1) and 8 CFR 214.2(h)(4)(i)(A)(1), an H–1B petition for a specialty occupation worker must demonstrate that the worker will perform services in a specialty occupation, which requires theoretical and practical application of a body of highly specialized knowledge and attainment of a baccalaureate or higher degree in the specific specialty (or its equivalent) as a minimum requirement for entry into the occupation in the United States. This proposal would ensure that petitioners are not circumventing specialty occupation requirements by imposing token requirements or requirements that are not normal to the third party. Specifically, under proposed 8 CFR 214.2(h)(4)(i)(B)(3), if the beneficiary will be staffed to a third party, meaning they will be contracted to fill a position in a third party’s organization, the actual work to be performed by the beneficiary must be in a specialty occupation. Therefore, it is the requirements of that third party, and not the petitioner, that are most relevant when determining whether the position is a specialty occupation. Relative to the no action baseline, this change has no costs associated with it, and there may 209 The hourly wage is estimated by diving the annual salary by the total number of hours worked in a year (2,080, which is 40 hours of full-time workweek for 52 weeks). $55.77 hourly wage = $116,000 annual pay ÷ 2,080 annual work hours. According to DOL that certifies the LCA of the H– 1B worker, a full-time H–1B employee works 40 hours per week for 52 weeks for a total of 2,080 hours in a year assuming full-time work is 40 hours per week. DOL, Wage and hour Division: ‘‘Fact Sheet #68—What Constitutes a Full-Time Employee Under H–1B Visa Program? ’’ (July 2009), https:// www.dol.gov/whd/regs/compliance/whdfs68.htm (Last visited July 30, 2019). 210 Hourly compensation of $ 80.87 = $55.77 average hourly wage rate for H–1B worker × 1.45 benefits-to-wage multiplier. See section V.A.5. for estimation of the benefits-to-wage multiplier. 211 Hourly compensation of $91.47 = $63.08 average hourly wage rate for Management Occupations (national) × 1.45 benefits-to-wage multiplier. See BLS, ‘‘Occupational Employment and Wage Statistics, Occupational Employment and Wages, May 2022, 11–0000 Management Occupations (Major Group),’’ https://www.bls.gov/ oes/2022/may/oes110000.htm (last visited May 11, 2023). 212 DHS assumes that beneficiary takes 50 percent of average inspection duration and supervisor or manager takes 50 percent. Average duration of interview hours for beneficiaries (0.54) = Average inspection duration (1.08) × 50% = 0.54 (rounded). Average duration of interview hours for Supervisors or managers (0.54) = Average inspection duration (1.08) × 50% = 0.54 (rounded). VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 p. Third-Party Placement (Codifying Defensor) PO 00000 Frm 00078 Fmt 4701 Sfmt 4702 E:\FR\FM\23OCP3.SGM 23OCP3 EP23OC23.060</GPH> lotter on DSK11XQN23PROD with PROPOSALS3 - Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules be transparency benefits due to this proposed change. Relative to the pre policy baseline petitioners may have taken time to demonstrate that the worker will perform services in a specialty occupation, which requires theoretical and practical application of a body of highly specialized knowledge and attainment of a baccalaureate or higher degree in the specific specialty. Because this has been in place for a long time, DHS cannot estimate how much time it would have taken for petitioners to provide that information. q. Additional Time Burden for Form I– 129 H–1B DHS estimates the current public reporting time burden is 2 hours and 20 minutes (2.34 hours), which includes the time for reviewing instructions, gathering the required documentation and information, completing the petition, preparing statements, attaching necessary documentation, and submitting the petition.213 This proposed rule would increase the burden per response by 5 minutes. Table 45 shows the total receipts received for Form I–129 H–1B 214 for FY 2018 through FY 2022. The table also details the number of Form I–129 H–1B receipts filed with an attorney or accredited representative using Form G– 72947 28. The number of Form G–28 submissions allows USCIS to estimate the number of Form I–129 H–1B that are filed by an attorney or accredited representative and thus estimate the opportunity costs of time for a petitioner, attorney, or accredited representative to file each form. USCIS received a low of 319,090 H–1B receipts filed with Form G–28 in FY 2021, and a high of 383,737, H–1B receipts filed with Form G–28 in FY 2022. Based on a 5-year annual average, DHS estimates the annual average receipts of Form I– 129 to be 338,850 with 79 percent of petitions filed by an attorney or accredited representative. In order to estimate the opportunity costs of time for completing and filing Form I–129 H–1B, DHS assumes that a petitioner will use an HR specialist, an in-house lawyer, or an outsourced lawyer to prepare Form I–129 H–1B petitions.215 DHS uses the mean hourly wage of $35.13 for HR specialists to estimate the opportunity cost of the time for preparing and submitting Form I– 129 H–1B.216 Additionally, DHS uses the mean hourly wage of $78.74 for inhouse lawyers to estimate the opportunity cost of the time for preparing and submitting Form I–129 H–1B.217 DHS accounts for worker benefits when estimating the total costs of compensation by calculating a benefitsto-wage multiplier using the BLS report detailing the average employer costs for employee compensation for all civilian workers in major occupational groups and industries. DHS estimates that the benefits-to-wage multiplier is 1.45 and, therefore, is able to estimate the full opportunity cost per petitioner, including employee wages and salaries and the full cost of benefits such as paid leave, insurance, retirement, etc.218 DHS multiplied the average hourly U.S. wage rate for HR specialists and in-house lawyers by 1.45 to account for the full cost of employee benefits, for a total of $50.94 219 per hour for an HR specialist and $114.17 220 per hour for an in-house lawyer. DHS recognizes that a firm may choose, but is not required, to outsource the preparation of these petitions and, therefore, presents two wage rates for lawyers. To determine the full opportunity costs of time if a firm hired an outsourced lawyer, DHS multiplied the average hourly U.S. wage rate for lawyers by 2.5 for a total of $196.85 221 to approximate an hourly wage rate for 213 See Instructions for Petition for a Nonimmigrant Worker (time burden estimate in the Paperwork Reduction Act section). Form I–129 H– 1B, https://www.uscis.gov/sites/default/files/ document/forms/i-129.pdf. OMB No. 1615–1615– 0009. Expires Nov. 30, 2025. The public reporting burden for this collection of information is estimated at 2 hours and 20 minutes (2.34 hours) per response. 214 The term ‘‘Form I–129 H–1B’’ refers to a Form I–129 that is filed for H–1B classification. 215 USCIS limited its analysis to HR specialists, in-house lawyers, and outsourced lawyers to present estimated costs. However, USCIS understands that not all entities employ individuals with these occupations and, therefore, recognizes equivalent occupations may also prepare and file these petitions. 216 See BLS, ‘‘Occupational Employment and Wage Statistics, Occupational Employment and Wages, May 2022, 13–1071 Human Resources Specialists,’’ https://www.bls.gov/oes/2022/may/ oes131071.htm (last visited May 11, 2023). 217 See BLS, ‘‘Occupational Employment and Wage Statistics, Occupational Employment and Wages, May 2022, 23–1011 Lawyers,’’ https:// www.bls.gov/oes/2022/may/oes231011.htm (last visited May. 11, 2023). 218 The benefits-to-wage multiplier is calculated as follows: (Total Employee Compensation per hour)/(Wages and Salaries per hour) ($42.48 Total Employee Compensation per hour)/($29.32 Wages and Salaries per hour) = 1.44884 = 1.45 (rounded). See BLS, Economic News Release, ‘‘Employer Costs for Employee Compensation—December 2022,’’ Table 1. ‘‘Employer Costs for Employee Compensation by ownership [Dec. 2022],’’ https:// www.bls.gov/news.release/archives/ecec_ 03172023.htm (last visited Mar. 21, 2023). The Employer Costs for Employee Compensation measures the average cost to employers for wages and salaries and benefits per employee hour worked. 219 Calculation: $35.13 * 1.45 = $50.94 total wage rate for HR specialist. 220 Calculation: $78.74 * 1.45 = $114.17 total wage rate for in-house lawyer. 221 Calculation: $78.74 * 2.5 = $196.85 total wage rate for an outsourced lawyer. VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 PO 00000 Frm 00079 Fmt 4701 Sfmt 4702 E:\FR\FM\23OCP3.SGM 23OCP3 EP23OC23.061</GPH> lotter on DSK11XQN23PROD with PROPOSALS3 Table 45. Total Form 1-129 H-lB Receints with and without Form G-28 FY 2018 throul!h FY 2022 Percentage of Form 1-129 H-lB Form 1-129 H-lB Total Form IForm 1-129 129 H-lB H-lB filed Fiscal Year Receipts Received Receipts Received without Form G-28 with Form G-28 Receipts with Form G28 2018 94 055 324 549 418 604 78% 2019 90,845 329,777 420,622 78% 2020 90 192 337 097 427 289 79% 2021 79,195 319,090 398,285 80% 2022 90,574 383,737 474,311 81% 79% 5-year Total 444,861 1,694,250 2,139,111 79% 5-vear Annual Averal!e 88,972 338,850 427,822 Source: USCIS, Office of Policy and Strategy, PRD, CLAIMS3 and ELIS databases, Mar. 13, 2023. 72948 Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules an outsourced lawyer 222 to prepare and submit Form I–129 H–1B.223 To estimate the opportunity cost of time to complete and file Form I–129 H– 1B, DHS applies the estimated time burden (2.34 hours) to the eligible population and compensation rates of those who may file with or without a lawyer.224 Table 46 shows the estimated annual opportunity cost of time for Form I–129 H–1B petitioners employing an in-house or outsourced lawyer to complete and file Form I–129 H–1B petitions. DHS does not know the exact number of petitioners who will choose an in-house or an outsourced lawyer but assumes it may be a 50/50 split and therefore provides an average. DHS estimates that these current opportunity costs of time for Form I–129 H–1B petitioners using an attorney or other representative range from $90,526,421 to $156,084,137 with an annual average of $123,305,279. BILLING CODE 9111–97–P Table 46. Current Annual Average Opportunity Costs of Time for Form 1-129 H-lB Petitioners Filing with an Attorney or Other Representative Eligible Time Burden to Total Population of Complete Form Current Petitioners Cost of Time 1-129 H-lB Opportunity Filing with a (Hours) Cost Lawver D=(AxBxC) A B C 338,850 In House Lawver 2.34 $114.17 $90 526 421 Outsourced Lawyer 338 850 2.34 $196.85 $156 084.137 $123,305,279 Avera2e Source: USCIS Analysis To estimate the current remaining opportunity cost of time for an HR specialist filing Form I–129 H–1B without a lawyer, DHS applies the estimated public reporting time burden (2.34 hours) to the compensation rate of an HR specialist. Table 47 estimates the current total annual opportunity cost of time to HR specialists completing and filing I–129 H–1B requests will be approximately $10,605,427. Table 48 shows the proposed estimated time burden (2.42 hours) to the eligible population and compensation rates of those who may file with or without a lawyer. DHS does not know the exact number of petitioners who will choose an in-house or an outsourced lawyer but assumes it may be a 50/50 split and therefore provides an average. These current opportunity costs of time for Form I–129 H–1B petitioners using an attorney or other representative are estimated to range from $93,621,341 to $161,420,346 with an annual average of $127,520,844. 222 The DHS analysis in ‘‘Exercise of TimeLimited Authority To Increase the Fiscal Year 2018 Numerical Limitation for the H–2B Temporary Nonagricultural Worker Program,’’ 83 FR 24905 (May 31, 2018), https://www.federalregister.gov/ documents/2018/05/31/2018-11732/exercise-oftime-limited-authority-to-increase-the-fiscal-year2018-numerical-limitation-for-the, used a multiplier of 2.5 to convert in-house attorney wages to the cost of outsourced attorney wages. The DHS ICE rule ‘‘Final Small Entity Impact Analysis: ‘Safe-Harbor Procedures for Employers Who Receive a No-Match Letter’ ’’ at G–4 (Aug. 25, 2008), https://www.regulations.gov/document/ ICEB-2006-0004-0922, also uses a multiplier. The methodology used in the Final Small Entity Impact Analysis remains sound for using 2.5 as a multiplier for outsourced labor wages in this proposed rule. 223 The DHS analysis in ‘‘Exercise of TimeLimited Authority To Increase the Fiscal Year 2018 Numerical Limitation for the H–2B Temporary Nonagricultural Worker Program,’’ 83 FR 24905 (May 31, 2018), https://www.federalregister.gov/ documents/2018/05/31/2018-11732/exercise-oftime-limited-authority-to-increase-the-fiscal-year2018-numerical-limitation-for-the, used a multiplier of 2.5 to convert in-house attorney wages to the cost of outsourced attorney wages. Also, the analysis for a DHS ICE rule, ‘‘Final Small Entity Impact Analysis: ‘Safe-Harbor Procedures for Employers Who Receive a No-Match Letter’ ’’ at G–4 (Aug. 25, 2008), https:// www.regulations.gov/document/ICEB-2006-00040922, used a multiplier. The methodology used in the Final Small Entity Impact Analysis remains sound for using 2.5 as a multiplier for outsourced labor wages in this proposed rule. 224 See ‘‘Instructions for Petition for a Nonimmigrant Worker,’’ Form I–129, OMB No. 1615–0009, expires Nov. 30, 2025, https:// www.uscis.gov/sites/default/files/document/forms/ i-129instr.pdf (last visited Nov. 3, 2022). VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 PO 00000 Frm 00080 Fmt 4701 Sfmt 4702 E:\FR\FM\23OCP3.SGM 23OCP3 EP23OC23.062</GPH> EP23OC23.063</GPH> lotter on DSK11XQN23PROD with PROPOSALS3 Table 47. Current Annual Average Opportunity Costs of Time for Form 1-129 H-lB Petitioners Filin2 without an Attornev or Accredited Reoresentative Time Burden to HR Specialist's Total Complete Form Opportunity Cost Opportunity Population 1-129 H-lB of time Cost of Time <Hours) A B D=(AxBxC) C Estimate Form 1-129 $10,605,427 88,972 2.34 $50.94 H-lB Source: USCIS Analysis Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules 72949 Table 48. New Annual Opportunity Costs of Time for Form 1-129 H-lB Petitioners Filing with an Attorney or Other Representative Population of Time Burden to Total Petitioners Complete Form Opportunity Cost of Time 1-129 H-lB Filing with a Cost Lawyer (Hours) A B D=(AxBxC) C In House Lawver 338,850 2.42 $114.17 $93,621,341 338,850 2.42 $196.85 $161,420,346 Outsourced Lawver $127,520,844 Avera2:e Source: USCIS Analysis To estimate the current remaining opportunity cost of time for an HR specialist filing Form I–129 H–1B without a lawyer, DHS applies the estimated public reporting time burden (2.42 hours) to the compensation rate of an HR specialist. Table 49 estimates the current total annual opportunity cost of time to HR specialists completing and filing I–129 H–1B requests will be approximately $10,968,006. Table 49. Proposed Annual Average Opportunity Costs of Time for Form 1-129 H-lB Petitioners Filine: without an Attorney or Accredited Representative Time Burden to HR Specialist's Total Complete Form Population Opportunity Cost Opportunity 1-129 H-lB of time Cost of Time <Hours) D=(AxBxC) A B C Estimate Form 1-129 88,972 2.42 $50.94 $10,968,006 H-lB Source: USCIS Analysis expected to be $4,578,144 shown in Table 50. This table shows the current total opportunity cost of time to file Table 50. Total Annual Costs to Form 1-129 H-lB Average Current Opportunity Cost Time for Lawyers to Comolete Form 1-129 H-lB Average Current Opportunity Cost Time for HR Specialist to Complete Form 1-129 H-lB Total $123,305,279 $10,605,427 $133,910,706 Average Proposed Opportunity Cost Time for Lawyers to Complete Form 1-129 H-lB Average Proposed Opportunity Cost Time for HR Specialist to Complete Form 1-129 H-lB Total $127,520,844 $10,968,006 $138,488,850 VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 $4,578,144 immigration attorneys’ time in order to access the same benefits. This section has emphasized that employers of H–1B beneficiaries already consume significant specialized resources. In contrast to policies that impose additional requirements upon PO 00000 Frm 00081 Fmt 4701 Sfmt 4702 petitioners and registrants, DHS believes the proposed modernization, efficiencies, flexibilities and integrity improvements have no likely consequence to current consumption of specialized resources such as HR Specialists’ time, in-house attorneys’ E:\FR\FM\23OCP3.SGM 23OCP3 EP23OC23.066</GPH> lotter on DSK11XQN23PROD with PROPOSALS3 Proposed Additional Opportunity Costs of Time for Form 1-129 H-lB Source: USCIS Analysis Finally, many DHS rulemakings include monetized or unquantified familiarization costs. This is appropriate when a likely consequence of proposed regulations could be additional individuals seeking out and consuming more specialized resources, such as Form I–129 H–1B and the proposed total opportunity cost of time. EP23OC23.064</GPH> EP23OC23.065</GPH> DHS estimates the total additional annual cost to petitioners completing and filing Form I–129 H–1B are 72950 Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules time, and even out-sourced attorneys time inclusive of indirect costs. An assumption that hundreds of thousands will spend 4 or more hours reading the entirety of this proposed rule, in addition to the 2.42 hour burden of Form I–129 H–1B, risks overrepresenting the interests of immigration attorneys relative to the other impacts this Regulatory Impact Analysis describes using supporting data and evidence. DHS invites public comment on familiarization costs and how any such costs should be accurately modeled. r. Additional Time Burden for H Classification Supplement to Form I– 129 DHS estimates the current public reporting time burden at 2 hours, for the H Classification Supplement, which includes the time for reviewing instructions, gathering the required documentation and information, completing the petition, preparing statements, attaching necessary documentation, and submitting the petition.225 This proposed rule would strengthen program integrity by codifying the authority to request contracts from petitioners. This change will increase the burden per response 5 minutes. Table 51 shows the total receipts received for H–1B petitions for FY 2018 through FY 2022. The table also shows the number of H–1B petitions submitted by an attorney or accredited representative using Form G–28. The number of Form G–28 submissions allows USCIS to estimate the number of H–1B petitions that an attorney or accredited representative submitted and thus estimate the opportunity costs of time for an attorney or accredited representative to file each form USCIS received a low of 398,285 of H–1B petitions in FY 2021, and a high of 474,311 of H–1B petitions in FY 2022. Based on a 5-year annual average, DHS estimates the annual average receipts of H–1B petitions to be 338,850 with 79 percent of petitions filed by an attorney or accredited representative. Table 51. Total H-lB Petitions with and without Form G-28, FY 2018 throu2:h FY 2022 Percentage of Form 1-129 HForm 1-129 H-lB Total Form Form 1-129 H1B Receipts 1-129 H-lB Fiscal Year Receipts Received Received with 1B filed with without Form G-28 Receipts Form G-28 Form G-28 94,055 2018 324 549 418 604 78% 90,845 2019 329 777 420 622 78% 90.192 337 097 427 289 79% 2020 79,195 2021 319 090 398 285 80% 90,574 2022 383 737 474 311 81% 444,861 1,694,250 2,139,111 79% 5-year Total 88,972 338,850 427,822 79% 5-vear Annual Avera2:e Source: USCIS, Office of Policy and Strategy, PRD, CLAIMS3 and ELIS databases, Mar. 13, 2023. Table 52 shows the estimated annual opportunity cost of time for submitting an H–1B petition employing an in-house or outsourced lawyer to complete and submit an H–1B petition. DHS does not know the exact number of petitioners who will choose an in-house or an outsourced lawyer but assumes it may be a 50/50 split and therefore provides an average. DHS estimates that these current annual opportunity costs of time for filing an H–1B petition using an attorney or other representative range from $77,373,009 to $133,405,245 with an average of $105,389,127. To estimate the current remaining opportunity cost of time for an HR specialist filing Form I–129 H–1B without a lawyer, DHS applies the estimated public reporting time burden (2 hours) to the compensation rate of an HR specialist. Table 53 estimates the current total annual opportunity cost of time to HR specialists completing and 225 See Instructions for Petition for a Nonimmigrant Worker (time burden estimate in the Paperwork Reduction Act section). Form I–129 H Classification Supplement, https://www.uscis.gov/ sites/default/files/document/forms/i-129.pdf. OMB No. 1615–1615–0009. Expires Nov. 30, 2025. The public reporting burden for this collection of information is estimated at 2 hours (2.0 hours) per response. VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 PO 00000 Frm 00082 Fmt 4701 Sfmt 4702 E:\FR\FM\23OCP3.SGM 23OCP3 EP23OC23.067</GPH> EP23OC23.068</GPH> lotter on DSK11XQN23PROD with PROPOSALS3 Table 52. Current Annual Average Opportunity Costs of Time for Filing an H-lB H Supplement Filin2: with an Attorney or Other Representative Population Time Burden to of Total Current Complete Form IPetitioners Cost of Time Opportunity 129 H Supplement Filing with Cost (Hours) a Lawver D=(AxBxC) A B C In House Lawyer 338 850 2 $114.17 $77 373 009 Outsourced 338,850 2 $196.85 $133,405,245 Lawver $105,389,127 Average Source: USCIS Analvsis Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules 72951 filing an H–1B petition will be approximately $9,064,467. Table 53. Current Average Opportunity Costs of Time for Filing an H-lB H Supplement Filing without an Attornev or Accredited Reoresentative Time Burden to HR Specialist's Total Complete Form 1-129 H-lB H Opportunity Cost Opportunity Population Supplement of time Cost of Time (Hours) D=(AxBxC) A B C Estimate Form 1-129 $9,064,467 88,972 2 $50.94 H-lB H Suoolement Source: USCIS Analysis Table 54 shows the proposed increased estimated time burden of 2 hours and 4 minutes (2.07 hours) to the eligible population and compensation rates of those who may file with or without a lawyer. DHS does not know the exact number of petitioners who will choose an in-house or an outsourced lawyer but assumes it may be a 50/50 split and therefore provides an average. DHS estimates that these current annual opportunity costs of time for filing an H–1B petition using an attorney or other representative range from $80,081,064 to $138,074,429 with an average of $109,077,747. Table 54. New Annual Opportunity Costs of Time for Form 1-129 H-lB H Supplement Petitioners Filing with an Attornev or Other Reoresentative Eligible Time Burden to Total Population of Complete Form ICost of Time Opportunity 129 H-lB H Petitioners Filing with a Supplement Cost Lawyer <Hours) D=(AxBxC) A B C In House Lawyer 338,850 2.07 $114.17 $80,081,064 338,850 2.07 $196.85 $138,074,429 Outsourced Lawver $109,077,747 Average Source: USCIS Analysis time to HR specialists completing and filing an H–1B petition will be approximately $9,381,724. Table 55. Proposed Annual Average Opportunity Costs of Time for Form 1-129 H-lB H Supplement Petitioners Filing without an Attorney or Accredited Reoresentative Time Burden to HR Specialist's Total Complete Form 1-129 H-lB H Population Opportunity Cost Opportunity Supplement of time Cost of Time (Hours) D=(AxBxC) A B C Estimate Form 1-129 H88,972 2.07 $50.94 $9,381,724 1B H Sunnlement Source: USCIS Analysis DHS estimates the total additional annual cost to petitioners completing and filing Form I–129 H–1B are VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 expected to be $4,005,877 shown in Table 56. This table shows the current total opportunity cost of time to file an PO 00000 Frm 00083 Fmt 4701 Sfmt 4702 H–1B H Supplement and the proposed total opportunity cost of time. E:\FR\FM\23OCP3.SGM 23OCP3 EP23OC23.071</GPH> estimated public reporting time burden (2.07 hours) to the compensation rate of an HR specialist. Table 55 estimates the current total annual opportunity cost of EP23OC23.069</GPH> EP23OC23.070</GPH> lotter on DSK11XQN23PROD with PROPOSALS3 To estimate the current remaining opportunity cost of time for an HR specialist filing Form I–129 H–1B without a lawyer, DHS applies the 72952 Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules Table 56. Total Annual Costs to Form 1-129 H-lB H Supplement Average Current Opportunity Cost Time for Lawyers to Complete Form 1-129 H-lB H Supplement Average Current Opportunity Cost Time for HR Specialist to Complete Form 1-129 H- lB H Suoolement Total $105,389,127 $9,064,467 $114,453,594 Average Proposed Opportunity Cost Time for Lawyers to Complete Form 1-129 H1B H Suoolement Average Proposed Opportunity Cost Time for HR Specialist to Complete Form 1-129 H- lB H Suoolement Total $109,077,747 $9,381,724 $118,459,471 Proposed Additional Opportunity Costs of Time for Form 1-129 H-lB H Suoolement Source: USCIS Analysis approval of H–1B petitions and delay admission of H–1B beneficiaries until they have secured work for them. 5. Total Quantified Net Costs of the Proposed Regulatory Changes In this section, DHS presents the total annual cost savings of this proposed rule annualized over a 10-year period of analysis. Table 57 details the annual cost savings of this proposed rule. DHS estimates the total cost savings is $5,920,408. Table 57. Summary of Cost Savings Description Amended Petitions Deference to prior USCIS Determinations of Eligibility Eliminating the Itinerary Requirement for H Programs Beneficiary Centric Selection Cost of Time Beneficiary Centric Selection Cost of Registrations Total Cost Savings Source: USCIS Analysis lotter on DSK11XQN23PROD with PROPOSALS3 DHS summarizes the annual costs of this proposed rule. Table 58 details the Cost Savings $297,673 $338,412 $708,491 $3,840,822 $735,010 $5,920,408 annual costs of this proposed rule. DHS estimates the total cost is $12,260,187. Table 58. Summary of Costs Description The H- lB Registration System Cost of W orksite Inspection for H- lB Workers Additional Time Burden H- lB Additional Time Burden for H Classification Supplement Total Costs Source: USCIS Analysis VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 PO 00000 Frm 00084 Fmt 4701 Sfmt 4725 Costs $3,001,285 $674,881 $4,578,144 $4,005,877 $12,260,187 E:\FR\FM\23OCP3.SGM 23OCP3 EP23OC23.074</GPH> DHS considered the alternative of eliminating the registration system and reverting to the paper-based filing system stakeholders used prior to implementing registration. However, when DHS considered the immense cost savings that registration provides to both USCIS and stakeholders and the significant resources the agency would incur to revert back to a paper-based H– 1B cap selection process, the benefits of having a registration system still outweigh the costs of potential abuse of the system. DHS is also seeking public comment on how to ensure that the limited number of H–1B cap-subject visas, and new H–1B status grants available each fiscal year are used for non-speculative job opportunities. DHS is seeking public comments on the possible approaches described in the preamble, as well as soliciting ideas that would further curb or eliminate the possibility that petitioners may have speculative job opportunities at the time of filing or EP23OC23.072</GPH> EP23OC23.073</GPH> 4. Alternatives Considered $4,005,877 Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules Net costs to the public of $6,339,779 are the total costs minus cost savings.226 Table 59 illustrates that over a 10-year period of analysis from FY 2023 through FY 2032 annualized costs would be 72953 $6,339,779 using 7-percent and 3percent discount rates. Table 59. Discounted Net Costs Over a 10-Year Period of Analysis Total Estimated Cost Fiscal Year $6,339,779 (U ndiscounted) BILLING CODE 9111–97–C B. Regulatory Flexibility Act (RFA) lotter on DSK11XQN23PROD with PROPOSALS3 1. Initial Regulatory Flexibility Analysis The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601 and 602, as amended by the Small Business Regulatory Enforcement Fairness Act of 1996, Public Law 104–121, requires Federal agencies to consider the potential impact of regulations on small businesses, small governmental jurisdictions, and small organizations during the development of their rules. The term ‘‘small entities’’ comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000.227 An ‘‘individual’’ is not considered a small entity and costs to an individual are not considered a small entity impact for RFA purposes. In addition, the courts have held that the RFA requires an agency to perform a regulatory flexibility analysis of small entity impacts only when a rule directly regulates small entities.228 Consequently, indirect impacts from a rule on a small entity are not considered as costs for RFA purposes. 226 Calculations: $12,260,187 Total Costs¥$5,920,217 Total Cost Savings = $6,339,779 Net Costs. 227 A small business is defined as any independently owned and operated business not VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 Discounted at 7 percent $5,925,027 $5,537,409 $5,175,148 $4,836,587 $4,520,175 $4,224,462 $3,948,096 $3,689,809 $3,448,420 $3,222,822 $44,527,955 $6,339,779 a. USCIS’s RFA analysis for this proposed rule focuses on the population of Form I–129 petitions for H–1B workers. Where cost savings occur from multiple registrants no longer registering on behalf of a common beneficiary, either deliberately or inadvertently, USCIS is unable to quantify the portion of potential cost savings accruing to small entities. Some of these cost savings may be partially offset by the advantage multiple registrations conferred over single, unique registrants, but it is ambiguous whether such small entities enjoy this advantage or feel increasingly compelled to do this by their belief that other lottery competitors are doing so. A Description of the Reasons Why the Action by the Agency Is Being Considered The purpose of this rulemaking is to modernize and improve the regulations relating to the H–1B program by: (1) streamlining the requirements of the H– 1B program; (2) improving program efficiency; (3) providing greater flexibility for petitioners and beneficiaries; and (4) improving integrity measures. b. A Statement of the Objectives of, and Legal Basis for, the Proposed Rule DHS’s objectives and legal authority for this proposed rule are discussed earlier in the preamble. dominant in its field that qualifies as a small business per the Small Business Act, 15 U.S.C. 632. 228 See Small Business Administration, A Guide For Government Agencies, How to Comply with the Regulatory Flexibility Act. https:// PO 00000 Frm 00085 Fmt 4701 Sfmt 4702 c. A Description and, Where Feasible, an Estimate of the Number of Small Entities to Which the Proposed Changes Would Apply For this analysis, DHS conducted a sample analysis of historical Form I–129 H–1B petitions to estimate the number of small entities impacted by this proposed rule. DHS utilized a subscription-based electronic database of U.S. entities, ReferenceUSA, as well as three other open-access, free databases of public and private entities, Manta, Cortera, and Guidestar to determine the North American Industry Classification System (NAICS) code, revenue, and employee count for each entity. To determine whether an entity is small for purposes of RFA, DHS first classified the entity by its NAICS code and then used Small Business Administration (SBA) guidelines to classify the revenue or employee count threshold for each entity. Some entities were classified as small based on their annual revenue, and some by their numbers of employees. Using FY 2022 internal data on actual filings of Form I–129 H–1B petitions, DHS identified 44,593 unique entities. DHS devised a methodology to conduct the small entity analysis based on a representative, random sample of the potentially impacted population. DHS first determined the minimum sample size necessary to achieve a 95-percent advocacy.sba.gov/wp-content/uploads/2019/06/ How-to-Comply-with-the-RFA.pdf (last visited Aug. 23 2023). E:\FR\FM\23OCP3.SGM 23OCP3 EP23OC23.075</GPH> Discounted at 3 percent $6,155,125 $5,975,850 $5,801,796 $5,632,812 $5,468,749 $5,309,465 $5,154,820 $5,004,680 $4,858,913 $4,717,391 $54,079,601 $6,339,779 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 10-vear Total Annualized Cost 72954 Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules confidence level confidence interval estimation for the impacted population of entities using the standard statistical formula at a 5-percent margin of error. DHS then created a sample size greater than the minimum necessary to increase the likelihood that our matches would meet or exceed the minimum required sample. DHS randomly selected a sample of 3,396 entities from the population of 44,593 entities that filed Form I–129 for H–1B petitions in FY 2022. Of the 3,396 entities, 1,724 entities returned a successful match of a filing entity in the ReferenceUSA, Manta, Cortera, and Guidestar databases; 1,672 entities did not return a match. Using these databases’ revenue or employee count and their assigned NAICS code, DHS determined 1,209 of the 1,724 matches to be small entities, 515 to be non-small entities. DHS assumes filing entities without database matches or missing revenue/employee count data are likely to be small entities. As a result, in order to prevent underestimating the number of small entities this proposed rule would affect, DHS considers all the nonmatched and missing entities as small entities for the purpose of this analysis. Therefore, DHS classifies 2,881 of 3,396 entities as small entities, including combined non-matches (1,672), and small entity matches (1,209). Thus, DHS estimates that 84.8 percent (2,881 of 3,396) of the entities filing Form I–129 H–1B petitions are small entities. In this analysis DHS assumes that the distribution of firm size for our sample is the same as the entire population of Form I–129 H–1B petitioners. Thus, DHS estimates the number of small entities to be 84.8 percent of the population of 44,593 entities that filed Form I–129 under the H–1B classification, as summarized in Table 60 below. The annual numeric estimate of the small entities impacted by this proposed rule is 37,815 entities.229 Population Number of Small Entities Proportion of Population (Percent) 44,593 37,815 84.8% It should be acknowledged here that DHS’s sample frame excludes H–2 petitioners identified by the RIA as benefitting from the proposal to no longer require itineraries, because this requirement has no adverse impacts to small entities and DHS has not identified opportunities to further enhance this benefit to small entities. Similarly, the proposal to codify deference has no adverse impacts to small entities. Additionally, while the proposed clarity for evidence of maintenance of status may indirectly impact small entities filing such petitions and applications, the costs and benefits fall predominantly and more directly upon the individuals. Following the distributional assumptions above, DHS uses the set of 1,209 small entities with matched revenue data to estimate the economic impact of the proposed rule on each small entity. The economic impact, in percentage, for each small entity is the sum of the impacts of the proposed changes divided by the entity’s sales revenue.230 DHS constructed the distribution of economic impact of the proposed rule based on the sample of 1,209 small entities. USCIS multiplied the proposed increase in cost per petition by the number of petitions filed by a small entity in FY22 to estimate the increase in cost to that small entity. USCIS then divided the increase in cost to that small entity by the annual revenue generated by that small entity. The average number of petitions filed per small entity was 10.3. Consequently, the average quantified increase per small entity was $152.43. Based on FY 2022 revenue, of the 1,209 small entities, 0 percent (0 small entities) would experience a cost increase that is greater than 1 percent of revenues. In addition to the quantitated costs to small entities, employers who do not cooperate with site visits who would face denial or revocation of their petition(s), which could result in costs to those businesses. 229 The annual numeric estimate of the small entities (37,815) = Population (44,593) * Percentage of small entities (84.8%). 230 The economic impact, in percentage, for each small entity i = ((Cost of one petition for entity i × Number of petitions for entity i)/Entity i’s sales revenue) × 100. The cost of one petition for entity i ($14.82) is estimated by dividing the total cost of this proposed VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 d. A Description of the Projected Reporting, Recordkeeping, and Other Compliance Requirements of the Proposed Rule, Including an Estimate of the Classes of Small Entities That Will Be Subject to the Requirement and the Types of Professional Skills The proposed beneficiary-centric selection process would result in additional burden to employers reporting beneficiaries’ passport information in the registration system, on Form I–129 H–1B petition and on H Classification Supplement to Form I– 129. DHS estimates increase for each of these respective burdens is 5 minutes. PO 00000 Frm 00086 Fmt 4701 Sfmt 4702 e. An Identification of All Relevant Federal Rules, to the Extent Practical, That May Duplicate, Overlap, or Conflict With the Proposed Rule DHS is unaware of any duplicative, overlapping, or conflicting Federal rules, but invites any comment and information regarding any such rules. f. A Description of Any Significant Alternatives to the Proposed Rule That Accomplish the Stated Objectives of Applicable Statutes and That Minimize Any Significant Economic Impact of the Proposed Rule on Small Entities With respect to beneficiary-centric lottery, there are no burdens to be minimized. While collection of passport information imposes some burden to prospective employers, USCIS found no other alternatives that achieved stated objectives with less burden to small entities. C. Unfunded Mandates Reform Act of 1995 (UMRA) The Unfunded Mandates Reform Act of 1995 (UMRA) is intended, among other things, to curb the practice of imposing unfunded Federal mandates on State, local, and tribal governments. Title II of UMRA requires each Federal agency to prepare a written statement assessing the effects of any Federal mandate in a proposed rule, or final rule for which the agency published a rule by the estimated population. $6,339,779/ 427,822 = $14.82. The entity’s sales revenue is taken from ReferenceUSA, Manta, Cortera, and Guidestar databases. E:\FR\FM\23OCP3.SGM 23OCP3 EP23OC23.076</GPH> lotter on DSK11XQN23PROD with PROPOSALS3 Table 60. Number of Small Entities for Form 1-129 for H-lB, FY 2022 Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules proposed rule, that includes any Federal mandate that may result in a $100 million or more expenditure (adjusted annually for inflation) in any one year by State, local, and tribal governments, in the aggregate, or by the private sector.231 In addition, the inflation-adjusted value of $100 million in 1995 is approximately $192 million in 2022 based on the Consumer Price Index for All Urban Consumers (CPI–U).232 This proposed rule does not contain a Federal mandate as the term is defined under UMRA.233 The requirements of title II of UMRA, therefore, do not apply, and DHS has not prepared a statement under UMRA. D. Executive Order 13132 (Federalism) This proposed rule would not have substantial direct effects on the States, on the relationship between the National Government and the States, or on the distribution of power and responsibilities among the various levels of government. Therefore, in accordance with section 6 of Executive Order 13132, it is determined that this proposed rule does not have sufficient federalism implications to warrant the preparation of a federalism summary impact statement. E. Executive Order 12988: Civil Justice Reform This proposed rule was drafted and reviewed in accordance with E.O. 12988, Civil Justice Reform. This proposed rule was written to provide a clear legal standard for affected conduct and was carefully reviewed to eliminate drafting errors and ambiguities, so as to minimize litigation and undue burden on the Federal court system. DHS has determined that this proposed rule meets the applicable standards provided in section 3 of E.O. 12988. 231 See 2 U.S.C. 1532(a). BLS, ‘‘Historical Consumer Price Index for All Urban Consumers (CPI–U): U.S. city average, all items, by month,’’ www.bls.gov/cpi/tables/ supplemental-files/historical-cpi-u-202212.pdf (last visited Jan. 19, 2023). Calculation of inflation: (1) Calculate the average monthly CPI–U for the reference year (1995) and the current year (2022); (2) Subtract reference year CPI–U from current year CPI–U; (3) Divide the difference of the reference year CPI–U and current year CPI–U by the reference year CPI–U; (4) Multiply by 100 = [(Average monthly CPI–U for 2022 ¥ Average monthly CPI– U for 1995)/(Average monthly CPI–U for 1995)]*100=[(292.655–152.383)/ 152.383]*100=(140.272/ 152.383)*100=0.92052263*100=92.05 percent = 92 percent (rounded). Calculation of inflation-adjusted value: $100 million in 1995 dollars*1.92=$192 million in 2022 dollars. 233 The term ‘‘Federal mandate’’ means a Federal intergovernmental mandate or a Federal private sector mandate. See 2 U.S.C. 1502(1), 658(6). lotter on DSK11XQN23PROD with PROPOSALS3 232 See VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 F. Executive Order 13175 (Consultation and Coordination With Indian Tribal Governments) This proposed rule does not have ‘‘tribal implications’’ because, if finalized, it would not have substantial direct effects on one or more Indian Tribes, on the relationship between the Federal Government and Indian Tribes, or on the distribution of power and responsibilities between the Federal Government and Indian Tribes. Accordingly, E.O. 13175, Consultation and Coordination with Indian Tribal Governments, requires no further agency action or analysis. G. National Environmental Policy Act (NEPA) DHS and its components analyze proposed actions to determine whether the National Environmental Policy Act (NEPA) 234 applies to them and, if so, what degree of analysis is required. DHS Directive 023–01, Rev. 01 (Directive) and Instruction Manual 023–01–001–01, Rev. 01 (Instruction Manual) 235 establish the procedures DHS and its components use to comply with NEPA and the Council on Environmental Quality (CEQ) regulations for implementing NEPA.236 The CEQ regulations allow Federal agencies to establish in their NEPA implementing procedures categories of actions (‘‘categorical exclusions’’) that experience has shown normally do not individually or cumulatively have a significant effect on the human environment and, therefore, do not require preparation of an Environmental Assessment or Environmental Impact Statement.237 Instruction Manual, Appendix A, Table 1 lists the DHS categorical exclusions. Under DHS NEPA implementing procedures, for an action to be categorically excluded, it must satisfy each of the following three conditions: (1) The entire action clearly fits within one or more of the categorical exclusions; (2) the action is not a piece of a larger action; and (3) no extraordinary circumstances exist that create the potential for a significant environmental effect.238 234 See Public Law 91–190, 42 U.S.C. 4321 through 4347. 235 See DHS, ‘‘Implementing the National Environmental Policy Act,’’ DHS Directive 023–01, Rev 01 (Oct. 31, 2014), and DHS Instruction Manual Rev. 01 (Nov. 6, 2014), https://www.dhs.gov/ publication/directive-023-01-rev-01-andinstruction-manual-023-01-001-01-rev-01-andcatex. 236 See 40 CFR parts 1500 through 1508. 237 See 40 CFR 1501.4(a). 238 See Instruction Manual, section V.B.2 (a–c). PO 00000 Frm 00087 Fmt 4701 Sfmt 4702 72955 As discussed throughout this preamble, this rulemaking includes a number of proposed regulatory improvements affecting H–1B specialty occupation workers, as well as a couple of provisions affecting other nonimmigrant classifications, including: H–2, H–3, F–1, L–1, O, P, Q–1, R–1, E– 3, and TN. If finalized, this proposed rule is intended to modernize and improve the efficiency of the H–1B program by: (1) amending the definition of a ‘‘specialty occupation’’ and the specialty occupation criteria; (2) clarifying when to file an amended petition; (3) codifying deference given to prior USCIS determinations regarding the petitioner’s, beneficiary’s, or applicant’s eligibility, when adjudicating certain extension requests (both H–1B and other nonimmigrant classifications) involving the same parties and the same underlying facts; (4) clarifying when a petitioner is required to submit evidence of maintenance of status; (5) eliminating the itinerary requirement for H nonimmigrant classifications; and (6) allowing H–1B petitioners to amend requested validity periods when the validity expires before adjudication. If finalized, this rulemaking will also modernize exemptions from the H–1B cap, extend automatic ‘‘cap-gap’’ extensions, and codify start date flexibility for certain cap-subject H–1B petitions. In addition, any final rule resulting from this NPRM will improve program integrity by curbing abuse of the H–1B registration process, including through beneficiary-centric selection; codifying USCIS’s authority to request contracts; requiring that the petitioner establish that it will employ the beneficiary in a non-speculative position in a specialty occupation; verifying that the LCA corresponds with the petition; revising the definition of U.S. employer; eliminating the employer-employee relationship requirement; codifying the existing requirement that the petitioner have a bona fide job offer for the beneficiary to work within the United States; requiring that petitioners have a legal presence in the United States and be amenable to service of process in the United States; clarifying that beneficiary-owners may qualify for H–1B status; conducting site visits; and codifying the requirement that the specialty occupation determination be assessed based on the third party, rather than the petitioner, if a beneficiary will be staffed to a third party. DHS is not aware of any significant impact on the environment, or any change in the environmental effect from E:\FR\FM\23OCP3.SGM 23OCP3 72956 Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules lotter on DSK11XQN23PROD with PROPOSALS3 current H–1B and other impacted nonimmigrant program rules, that will result from the proposed rule changes. DHS therefore finds this proposed rule clearly fits within categorical exclusion A3 established in the Department’s implementing procedures. The proposed amendments, if finalized, would be stand-alone rule changes and are not a part of any larger action. In accordance with the Instruction Manual, DHS finds no extraordinary circumstances associated with the proposed rules that may give rise to significant environmental effects requiring further environmental analysis and documentation. Therefore, this action is categorically excluded and no further NEPA analysis is required. H. Paperwork Reduction Act Under the Paperwork Reduction Act of 1995 (PRA), 44 U.S.C. 3501–12, DHS must submit to OMB, for review and approval, any reporting requirements inherent in a rule unless they are exempt. DHS and USCIS invite the general public and other Federal agencies to comment on the impact to the proposed collection of information. In accordance with the PRA, the information collection notice is published in the Federal Register to obtain comments regarding the proposed edits to the information collection instrument. Comments are encouraged and will be accepted for 60 days from the publication date of the proposed rule. All submissions received must include the agency name and OMB Control Number 1615–0144 and/or 1615–0009 in the body of the letter. Please refer to the ADDRESSES and I. Public Participation section of this proposed rule for instructions on how to submit comments. Comments on this information collection should address one or more of the following four points: (1) Evaluate whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; (2) Evaluate the accuracy of the agency’s estimate of the burden of the collection of information, including the validity of the methodology and assumptions used; (3) Enhance the quality, utility, and clarity of the information to be collected; and (4) Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology, VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 e.g., permitting electronic submission of responses. H–1B Registration Tool (OMB Control No. 1615–0144) (1) Type of Information Collection: Revision of a Currently Approved Collection. (2) Title of the Form/Collection: H–1B Registration Tool. (3) Agency form number, if any, and the applicable component of DHS sponsoring the collection: OMB–64; USCIS. (4) Affected public who will be asked or required to respond, as well as a brief abstract: Primary: Business or other forprofit. USCIS uses the data collected on this form to determine which employers will be informed that they may submit a USCIS Form I–129, Petition for Nonimmigrant Worker, for H–1B classification. (5) An estimate of the total number of respondents and the amount of time estimated for an average respondent to respond: The estimated total number of respondents for the information collection H–1B Registration Tool (Businesses) is 20,950 and the estimated hour burden per response is 0.6 hours. The estimated total number of respondents for the information collection H–1B Registration Tool (Attorneys) is 19,339 and the estimated hour burden per response is 0.6 hours. The total number of responses (355,590) is estimated by averaging the total number of registrations received during the H–1B cap fiscal years 2021, 2022, and 2023. (6) An estimate of the total public burden (in hours) associated with the collection: The total estimated annual hour burden associated with this collection of information is 213,354 hours. (7) An estimate of the total public burden (in cost) associated with the collection: The estimated total annual cost burden associated with this collection of information is $0. Form I–129 (OMB Control No. 1615– 0009) (1) Type of Information Collection: Revision of a Currently Approved Collection. (2) Title of the Form/Collection: Petition for Nonimmigrant Worker. (3) Agency form number, if any, and the applicable component of DHS sponsoring the collection: I–129, E–1/E– 2 Classification Supplement, Trade Agreement Supplement, H Classification Supplement, H–1B and H–1B1 Data Collection and Filing Exemption Supplement, L Classification Supplement, O and P Classification PO 00000 Frm 00088 Fmt 4701 Sfmt 4702 Supplement, Q–1 Classification Supplement, and R–1 Classification Supplement; USCIS. (4) Affected public who will be asked or required to respond, as well as a brief abstract: Primary: Business or other forprofit. USCIS uses Form I–129 and accompanying supplements to determine whether the petitioner and beneficiary(ies) is (are) eligible for the nonimmigrant classification. A U.S. employer, or agent in some instances, may file a petition for nonimmigrant worker to employ foreign nationals under the following nonimmigrant classifications: H–1B, H–2A, H–2B, H– 3, L–1, O–1, O–2, P–1, P–2, P–3, P–1S, P–2S, P–3S, Q–1, or R–1 nonimmigrant worker. The collection of this information is also required from a U.S. employer on a petition for an extension of stay or change of status for E–1, E– 2, E–3, Free Trade H–1B1 Chile/ Singapore nonimmigrants and TN (USMCA workers) who are in the United States. (5) An estimate of the total number of respondents and the amount of time estimated for an average respondent to respond: The estimated total number of respondents for the information collection I–129 is 294,751 and the estimated hour burden per response is 2.42 hours. The estimated total number of respondents for the information collection E–1/E–1 Classification Supplement is 4,760 and the estimated hour burden per response is 0.67 hours. The estimated total number of respondents for the information collection Trade Agreement Supplement is 3,057 and the estimated hour burden per response is 0.67 hours. The estimated total number of respondents for the information collection H Classification is 96,291 and the estimated hour burden per response is 2.07 hours. The estimated total number of respondents for the information collection H–1B and H–1B1 Data Collection and Filing Fee Exemption Supplement is 96,291 and the estimated hour burden per response is 1 hour. The estimated total number of respondents for the information collection L Classification Supplement is 37,831 and the estimated hour burden per response is 1.34 hour. The estimated total number of respondents for the information collection O and P Classification Supplement is 22,710 and the estimated hour burden per response is 1 hour. The estimated total number of respondents for the information collection Q–1 Classification Supplement is 155 and the estimated hour burden per response is 0.34 hours. The estimated total number of respondents for the information collection R–1 E:\FR\FM\23OCP3.SGM 23OCP3 Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules Classification Supplement is 6,635 and the estimated hour burden per response is 2.34 hours. (6) An estimate of the total public burden (in hours) associated with the collection: The total estimated annual hour burden associated with this collection of information is 1,103,130 hours. (7) An estimate of the total public burden (in cost) associated with the collection: The estimated total annual cost burden associated with this collection of information is $70,681,290. List of Subjects in 8 CFR Part 214 Administrative practice and procedure, Aliens, Cultural exchange program, Employment, Foreign officials, Health professions, Reporting and recordkeeping requirements, Students. Accordingly, DHS proposes to amend chapter I of title 8 of the Code of Federal Regulations as follows: PART 214—NONIMMIGRANT CLASSES 1. The authority citation for part 214 continues to read as follows: ■ Authority: 6 U.S.C. 202, 236; 8 U.S.C. 1101, 1102, 1103, 1182, 1184, 1186a, 1187, 1221, 1281, 1282, 1301–1305, 1357, and 1372; sec. 643, Pub. L. 104–208, 110 Stat. 3009–708; Pub. L. 106–386, 114 Stat. 1477– 1480; section 141 of the Compacts of Free Association with the Federated States of Micronesia and the Republic of the Marshall Islands, and with the Government of Palau, 48 U.S.C. 1901 note and 1931 note, respectively; 48 U.S.C. 1806; 8 CFR part 2; Pub. L. 115–218, 132 Stat. 1547 (48 U.S.C. 1806). 2. Amend § 214.1 by: a. Revising paragraphs (c)(1) and (4); b. Redesignating paragraph (c)(5) as paragraph (c)(7); ■ c. Adding new paragraph (c)(5) and paragraph (c)(6); and ■ d. Revising newly redesignated paragraph (c)(7). The revisions and additions read as follows: ■ ■ ■ § 214.1 Requirements for admission, extension, and maintenance of status. lotter on DSK11XQN23PROD with PROPOSALS3 * * * * * (c) * * * (1) Extension or amendment of stay for certain employment-based nonimmigrant workers. An applicant or petitioner seeking the services of an E– 1, E–2, E–3, H–1B, H–1B1, H–2A, H–2B, H–3, L–1, O–1, O–2, P–1, P–2, P–3, P– 1S, P–2S, P–3S, Q–1, R–1, or TN nonimmigrant beyond the period previously granted, or seeking to amend the terms and conditions of the nonimmigrant’s stay without a request for additional time, must file for an extension of stay or amendment of stay, VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 on Form I–129, with the fee prescribed in 8 CFR 103.7, with the initial evidence specified in § 214.2, and in accordance with the form instructions. Dependents holding derivative status may be included in the petition if it is for only one worker and the form version specifically provides for their inclusion. In all other cases, dependents of the worker should file extensions of stay using Form I–539. * * * * * (4) Timely filing and maintenance of status. (i) An extension or amendment of stay may not be approved for an applicant or beneficiary who failed to maintain the previously accorded status or where such status expired before the application or petition was filed, except that USCIS may excuse the late filing in its discretion where it is demonstrated at the time of filing that: (A) The delay was due to extraordinary circumstances beyond the control of the applicant or petitioner, and USCIS finds the delay commensurate with the circumstances; (B) The applicant or beneficiary has not otherwise violated their nonimmigrant status; (C) The applicant or beneficiary remains a bona fide nonimmigrant; and (D) The applicant or beneficiary is not the subject of deportation proceedings under section 242 of the Act (prior to April 1, 1997) or removal proceedings under section 240 of the Act. (ii) If USCIS excuses the late filing of an extension of stay or amendment of stay request, it will do so without requiring the filing of a separate application or petition and will grant the extension of stay from the date the previously authorized stay expired or the amendment of stay from the date the petition was filed. (5) Deference to prior USCIS determinations of eligibility. When adjudicating a request filed on Form I– 129 involving the same parties and the same underlying facts, USCIS gives deference to its prior determination of the petitioner’s, applicant’s, or beneficiary’s eligibility. However, USCIS need not give deference to a prior approval if: there was a material error involved with a prior approval; there has been a material change in circumstances or eligibility requirements; or there is new, material information that adversely impacts the petitioner’s, applicant’s, or beneficiary’s eligibility. (6) Evidence of maintenance of status. When requesting an extension or amendment of stay on Form I–129, an applicant or petitioner must submit supporting evidence to establish that the PO 00000 Frm 00089 Fmt 4701 Sfmt 4702 72957 applicant or beneficiary maintained the previously accorded nonimmigrant status before the extension or amendment request was filed. Evidence of such maintenance of status may include, but is not limited to: copies of paystubs, W–2 forms, quarterly wage reports, tax returns, contracts, and work orders. (7) Decision on extension or amendment of stay request. Where an applicant or petitioner demonstrates eligibility for a requested extension or amendment of stay, USCIS may grant the extension or amendment in its discretion. The denial of an extension or amendment of stay request may not be appealed. * * * * * ■ 3. Amend § 214.2 by: ■ a. Revising paragraph (f)(5)(vi)(A); ■ b. Removing and reserving paragraph (h)(2)(i)(B); ■ c. Revising paragraphs (h)(2)(i)(E), (F), and (G) and (h)(4)(i)(B); ■ d. Revising the definitions of ‘‘Specialty occupation’’ and ‘‘United States employer’’ in paragraph (h)(4)(ii); ■ e. Revising paragraphs (h)(4)(iii) heading and (h)(4)(iii)(A); ■ f. Adding paragraph (h)(4)(iii)(F); ■ g. Revising paragraph (h)(4)(iv) introductory text; ■ h. Adding paragraph (h)(4)(iv)(C); ■ i. Revising paragraphs (h)(8)(iii)(A)(1), (2), (4), and (5), (h)(8)(iii)(A)(6)(i) and (ii), (h)(8)(iii)(A)(7), (h)(8)(iii)(D) and (E), (h)(8)(iii)(F)(2)(iv), (h)(8)(iii)(F)(4), and (h)(9)(i); ■ j. Adding paragraphs (h)(9)(ii)(D) and (h)(9)(iii)(E); ■ k. Revising paragraph (h)(10)(ii); ■ l. Adding paragraph (h)(10)(iii); ■ m. Revising paragraphs (h)(11)(ii) and (h)(11)(iii)(A)(2) and (5); ■ n. Adding paragraphs (h)(11)(iii)(A)(6) and (7); and ■ o. Revising paragraphs (h)(14), (h)(19)(iii)(B)(4), (h)(19)(iii)(C), (h)(19)(iv), (l)(14)(i), (o)(11), and (p)(13). The revisions and additions read as follows: § 214.2 Special requirements for admission, extension, and maintenance of status. * * * * * (f) * * * (5) * * * (vi) * * * (A) The duration of status, and any employment authorization granted under 8 CFR 274a.12(c)(3)(i)(B) or (C), of an F–1 student who is the beneficiary of an H–1B petition subject to section 214(g)(1)(A) of the Act (8 U.S.C. 1184(g)(1)(A)) and who requests a change of status will be automatically extended until April 1 of the fiscal year E:\FR\FM\23OCP3.SGM 23OCP3 lotter on DSK11XQN23PROD with PROPOSALS3 72958 Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules for which such H–1B status is being requested or until the validity start date of the approved petition, whichever is earlier, where such petition: (1) Has been timely filed; (2) Requests an H–1B employment start date in the fiscal year for which such H–1B status is being requested consistent with paragraph (h)(2)(i)(I) of this section; and (3) Is nonfrivolous. * * * * * (h) * * * (2) * * * (i) * * * (E) Amended or new petition—(1) General provisions. The petitioner must file an amended or new petition, with the appropriate fee and in accordance with the form instructions, to reflect any material changes in the terms and conditions of employment or training or the beneficiary’s eligibility as specified in the original approved petition. An amended or new H–1B, H–2A, or H–2B petition must be accompanied by a current or new Department of Labor determination. In the case of an H–1B petition, the requirement in this paragraph (h)(2)(i)(E)(1) includes a current or new certified labor condition application. (2) Additional H–1B provisions. The amended or new petition must be properly filed before the material change(s) takes place. The beneficiary is not authorized to work under the materially changed terms and conditions of employment until the new or amended H–1B petition is approved and takes effect, unless the beneficiary is eligible for H–1B portability pursuant to paragraph (h)(2)(i)(H) of this section. Any change in the place of employment to a geographical area that requires a corresponding labor condition application to be certified to USCIS is considered a material change and requires an amended or new petition to be filed with USCIS before the H–1B worker may begin work at the new place of employment. Provided there are no material changes in the terms and conditions of the H–1B worker’s employment, a petitioner does not need to file an amended or new petition when: (i) Moving a beneficiary to a new job location within the same area of intended employment as listed on the labor condition application certified to USCIS in support of the current H–1B petition approval authorizing the H–1B nonimmigrant’s employment; (ii) Placing a beneficiary at a shortterm placements(s) or assignment(s) at any worksite(s) outside of the area of intended employment for a total of 30 VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 days or less in a 1-year period, or for a total of 60 days or less in a 1-year period where the H–1B beneficiary continues to maintain an office or work station at their permanent worksite, the beneficiary spends a substantial amount of time at the permanent worksite in a 1-year period, and the beneficiary’s residence is located in the area of the permanent worksite and not in the area of the short-term worksite(s); or (iii) An H–1B beneficiary is going to a non-worksite location to participate in employee development, will be spending little time at any one location, or when the job is peripatetic in nature, in that the normal duties of the beneficiary’s occupation (rather than the nature of the employer’s business) requires frequent travel (local or nonlocal) from location to location. Peripatetic jobs include situations where the job is primarily at one location, but the beneficiary occasionally travels for short periods to other locations on a casual, short-term basis, which can be recurring but not excessive (i.e., not exceeding 5 consecutive workdays for any one visit by a peripatetic worker, or 10 consecutive workdays for any one visit by a worker who spends most work time at one location and travels occasionally to other locations). (F) Agents as petitioners. A United States agent may file a petition in cases involving workers who are traditionally self-employed or workers who use agents to arrange short-term employment on their behalf with numerous employers, and in cases where a foreign employer authorizes the agent to act on its behalf. A United States agent may be: the actual employer of the beneficiary; the representative of both the employer and the beneficiary; or a person or entity authorized by the employer to act for, or in place of, the employer as its agent. The burden is on the agent to explain the terms and conditions of the employment and to provide any required documentation. In questionable cases, a contract between the employers and the beneficiary or beneficiaries may be required. (1) An agent performing the function of an employer must guarantee the wages and other terms and conditions of employment by contractual agreement with the beneficiary or beneficiaries of the petition. (2) A foreign employer who, through a United States agent, files a petition for an H nonimmigrant alien is responsible for complying with all of the employer sanctions provisions of section 274A of the Act and 8 CFR part 274a. (G) Multiple H–1B petitions or registrations. An employer may not file PO 00000 Frm 00090 Fmt 4701 Sfmt 4702 or submit, in the same fiscal year, more than one H–1B petition or registration on behalf of the same alien if the alien is subject to the numerical limitations of section 214(g)(1)(A) of the Act or is eligible for exemption from those limitations under section 214(g)(5)(C) of the Act. However, if an H–1B petition is denied, on a basis other than fraud or misrepresentation, the employer may file a subsequent H–1B petition on behalf of the same alien in the same fiscal year, provided that USCIS continues to accept registrations, or petitions if registration is suspended, towards the numerical allocations and there is a valid registration that was selected on behalf of that beneficiary, or if the filing qualifies as exempt from the applicable numerical limitations. Otherwise, filing or submitting more than one H–1B petition or registration by an employer on behalf of the same alien in the same fiscal year may result in the denial or revocation of all such petitions and invalidation of all such registrations. If USCIS believes that related entities (including, but not limited to, a parent company, subsidiary, or affiliate) may not have a legitimate business need to file or submit more than one H–1B petition or registration on behalf of the same alien subject to the numerical limitations of section 214(g)(1)(A) of the Act or otherwise eligible for an exemption under section 214(g)(5)(C) of the Act, USCIS may issue a request for evidence, notice of intent to deny, or notice of intent to revoke each petition. If any of the related entities fail to demonstrate a legitimate business need to file or submit an H–1B petition or registration on behalf of the same alien, all petitions filed on that alien’s behalf by the related entities may be denied or revoked, and all such registrations invalidated. This limitation on petitions and registrations will not apply if the multiple filings or submissions occurred as a result of USCIS requiring petitioners to refile or resubmit previously submitted petitions or registrations. * * * * * (4) * * * (i) * * * (B) General requirements for petitions involving a specialty occupation—(1) Labor condition application requirements. (i) Before filing a petition for H–1B classification in a specialty occupation, the petitioner must obtain a certified labor condition application from the Department of Labor in the occupational specialty in which the alien(s) will be employed. (ii) Certification by the Department of Labor of a labor condition application in E:\FR\FM\23OCP3.SGM 23OCP3 lotter on DSK11XQN23PROD with PROPOSALS3 Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules an occupational classification does not constitute a determination by the agency that the occupation in question is a specialty occupation. USCIS will determine whether the labor condition application involves a specialty occupation as defined in section 214(i)(1) of the Act and properly corresponds with the petition. USCIS will also determine whether all other eligibility requirements have been met, such as whether the alien for whom H– 1B classification is sought qualifies to perform services in the specialty occupation as prescribed in section 214(i)(2) of the Act. (iii) If all of the beneficiaries covered by an H–1B labor condition application have not been identified at the time a petition is filed, petitions for newly identified beneficiaries may be filed at any time during the validity of the labor condition application using photocopies of the same certified labor condition application. Each petition must refer by file number to all previously approved petitions for that labor condition application. (iv) When petitions have been approved for the total number of workers specified in the labor condition application, substitution of aliens against previously approved openings cannot be made. A new labor condition application will be required. (v) If the Secretary of Labor notifies USCIS that the petitioning employer has failed to meet a condition of paragraph (B) of section 212(n)(1) of the Act, has substantially failed to meet a condition of paragraphs (C) or (D) of section 212(n)(1) of the Act, has willfully failed to meet a condition of paragraph (A) of section 212(n)(1) of the Act, or has misrepresented any material fact in the application, USCIS will not approve petitions filed with respect to that employer under section 204 or 214(c) of the Act for a period of at least 1 year from the date of receipt of such notice. (vi) If the employer’s labor condition application is suspended or invalidated by the Department of Labor, USCIS will not suspend or revoke the employer’s approved petitions for aliens already employed in specialty occupations if the employer has certified to the Department of Labor that it will comply with the terms of the labor condition application for the duration of the authorized stay of aliens it employs. (2) Inspections, evaluations, verifications, and compliance reviews. (i) The information provided on an H– 1B petition and the evidence submitted in support of such petition may be verified by USCIS through lawful means as determined by USCIS, including telephonic and electronic verifications VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 and onsite inspections. Such verifications and inspections may include, but are not limited to: electronic validation of a petitioner’s or third party’s basic business information; visits to the petitioner’s or third party’s facilities; interviews with the petitioner’s or third party’s officials; reviews of the petitioner’s or third party’s records related to compliance with immigration laws and regulations; and interviews with any other individuals possessing pertinent information, as determined by USCIS, which may be conducted in the absence of the employer or the employer’s representatives; and reviews of any other records that USCIS may lawfully obtain and that it considers pertinent to verify facts related to the adjudication of the H–1B petition, such as facts relating to the petitioner’s and beneficiary’s H– 1B eligibility and compliance. The interviews may be conducted on the employer’s property, or as feasible, at a neutral location agreed to by the interviewee and USCIS away from the employer’s property. An inspection may be conducted at locations including the petitioner’s headquarters, satellite locations, or the location where the beneficiary works, has worked, or will work, including third party worksites, as applicable. USCIS may commence verification or inspection under this paragraph for any petition and at any time after an H–1B petition is filed, including any time before or after the final adjudication of the petition. The commencement of such verification and inspection before the final adjudication of the petition does not preclude the ability of USCIS to complete final adjudication of the petition before the verification and inspection are completed. (ii) USCIS conducts on-site inspections or other compliance reviews to verify facts related to the adjudication of the petition and compliance with H– 1B petition requirements. If USCIS is unable to verify facts, including due to the failure or refusal of the petitioner or a third party to cooperate in an inspection or other compliance review, then such inability to verify facts, including due to failure or refusal to cooperate, may result in denial or revocation of any H–1B petition for H– 1B workers performing services at the location or locations that are a subject of inspection or compliance review, including any third party worksites. (3) Third party requirements. If the beneficiary will be staffed to a third party, meaning they will be contracted to fill a position in a third party’s organization and becomes part of that third party’s organizational hierarchy by PO 00000 Frm 00091 Fmt 4701 Sfmt 4702 72959 filling a position in that hierarchy (and not merely providing services to the third party), the actual work to be performed by the beneficiary must be in a specialty occupation. When staffed to a third party, it is the requirements of that third party, and not the petitioner, that are most relevant when determining whether the position is a specialty occupation. * * * * * (ii) * * * Specialty occupation means an occupation that requires theoretical and practical application of a body of highly specialized knowledge in fields of human endeavor including, but not limited to, architecture, engineering, mathematics, physical sciences, social sciences, medicine and health, education, business specialties, accounting, law, theology, and the arts, and that requires the attainment of a bachelor’s degree or higher in a specific specialty, or its equivalent, as a minimum for entry into the occupation in the United States. The required specialized studies must be directly related to the position. A position is not a specialty occupation if attainment of a general degree, such as business administration or liberal arts, without further specialization, is sufficient to qualify for the position. A position may allow a range of degrees or apply multiple bodies of highly specialized knowledge, provided that each of those qualifying degree fields or each body of highly specialized knowledge is directly related to the position. United States employer means a person, firm, corporation, contractor, or other association, or organization in the United States that: (1) Has a bona fide job offer for the beneficiary to work within the United States, which may include telework, remote work, or other off-site work within the United States; (2) Has a legal presence in the United States and is amenable to service of process in the United States; and (3) Has an Internal Revenue Service Tax identification number. (4) If the H–1B beneficiary possesses a controlling interest in the petitioner, such a beneficiary may perform duties that are directly related to owning and directing the petitioner’s business as long as the beneficiary will perform specialty occupation duties a majority of the time, consistent with the terms of the H–1B petition. (iii) General H–1B requirements—(A) Criteria for specialty occupation position. A position does not meet the definition of specialty occupation in paragraph (h)(4)(ii) of this section unless E:\FR\FM\23OCP3.SGM 23OCP3 lotter on DSK11XQN23PROD with PROPOSALS3 72960 Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules it also satisfies at least one of the following criteria at paragraphs (h)(4)(iii)(A)(1) through (4) of this section: (1) A U.S. baccalaureate or higher degree in a directly related specific specialty, or its equivalent, is normally the minimum requirement for entry into the particular occupation; (2) A U.S. baccalaureate or higher degree in a directly related specific specialty, or its equivalent, is normally required for parallel positions among similar organizations in the employer’s United States industry; (3) The employer, or third party if the beneficiary will be staffed to that third party, normally requires a U.S. baccalaureate or higher degree in a directly related specific specialty, or its equivalent, for the position; or (4) The specific duties of the proffered position are so specialized, complex, or unique that the knowledge required to perform the duties are normally associated with the attainment of a U.S. baccalaureate or higher degree in a directly related specific specialty, or its equivalent. (5) For purposes of the criteria at paragraphs (h)(4)(iii)(A)(1) through (4) of this section, normally means conforming to a type, standard, or regular pattern, and is characterized by that which is considered usual, typical, common, or routine. Normally does not mean always. * * * * * (F) Non-speculative position in a specialty occupation. At the time of filing, the petitioner must establish that it has a non-speculative position in a specialty occupation available for the beneficiary as of the start date of the validity period as requested on the petition. (iv) General documentary requirements for H–1B classification in a specialty occupation. Except as specified in paragraph (h)(4)(iv)(C) of this section, an H–1B petition involving a specialty occupation must be accompanied by: * * * * * (C) In accordance with 8 CFR 103.2(b) and paragraph (h)(9) of this section, USCIS may request evidence such as contracts, work orders, or other similar evidence between all parties in a contractual relationship showing the terms and conditions of the beneficiary’s work and the minimum educational requirements to perform the duties. * * * * * (8) * * * (iii) * * * (A) * * * VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 (1) Registration requirement. Except as provided in paragraph (h)(8)(iv) of this section, before a petitioner can file an H–1B cap-subject petition for a beneficiary who may be counted under section 214(g)(1)(A) of the Act (‘‘H–1B regular cap’’) or eligible for exemption under section 214(g)(5)(C) of the Act (‘‘H–1B advanced degree exemption’’), the petitioner must register to file a petition on behalf of a beneficiary electronically through the USCIS website (www.uscis.gov). To be eligible to file a petition for a beneficiary who may be counted against the H–1B regular cap or the H–1B advanced degree exemption for a particular fiscal year, a registration must be properly submitted in accordance with 8 CFR 103.2(a)(1), paragraph (h)(8)(iii) of this section, and the form instructions, for the same fiscal year. (2) Limitation on beneficiaries. A prospective petitioner must electronically submit a separate registration for each beneficiary it seeks to register, and each beneficiary must be named. A petitioner may only submit one registration per beneficiary in any fiscal year. If a petitioner submits more than one registration per beneficiary in the same fiscal year, all registrations filed by that petitioner relating to that beneficiary for that fiscal year may be considered invalid, and USCIS may deny or revoke the approval of any petition filed for the beneficiary based on those registrations. If USCIS determines that registrations were submitted for the same beneficiary by the same or different registrants, but using different identifying information, USCIS may find those registrations invalid and deny or revoke the approval of any petition filed based on those registrations. Petitioners will be given notice and the opportunity to respond before USCIS denies or revokes the approval of a petition. * * * * * (4) Selecting registrations based on unique beneficiaries. Registrations will be counted based on the number of unique beneficiaries who are registered. (i) Should a random selection be necessary, each unique beneficiary will only be counted once towards the random selection of registrations, regardless of how many registrations were submitted for that beneficiary. A petitioner may file an H–1B cap-subject petition on behalf of a registered beneficiary only after a registration for that beneficiary has been selected for that fiscal year. USCIS will notify all registrants that submitted a registration on behalf of a selected beneficiary that PO 00000 Frm 00092 Fmt 4701 Sfmt 4702 they may file a petition for that beneficiary. (ii) Registrations must include the beneficiary’s valid passport information, as specified in the form instructions. Each beneficiary must only be registered under one passport, and if the beneficiary is abroad, the passport information must correspond to the passport the beneficiary intends to use to enter the United States. (5) Regular cap selection. In determining whether there are enough registrations for unique beneficiaries to meet the H–1B regular cap, USCIS will consider all properly submitted registrations relating to beneficiaries that may be counted under section 214(g)(1)(A) of the Act, including those that may also be eligible for exemption under section 214(g)(5)(C) of the Act. Registrations will be counted based on the number of unique beneficiaries that are registered. (i) Fewer registrations than needed to meet the H–1B regular cap. At the end of the annual initial registration period, if USCIS determines that it has received fewer registrations for unique beneficiaries than needed to meet the H–1B regular cap, USCIS will notify all petitioners that have properly registered that their registrations have been selected. USCIS will keep the registration period open beyond the initial registration period, until it determines that it has received a sufficient number of registrations for unique beneficiaries to meet the H–1B regular cap. Once USCIS has received a sufficient number of registrations for unique beneficiaries to meet the H–1B regular cap, USCIS will no longer accept registrations for petitions subject to the H–1B regular cap under section 214(g)(1)(A). USCIS will monitor the number of registrations received and will notify the public of the date that USCIS has received the necessary number of registrations for unique beneficiaries (the ‘‘final registration date’’). The day the public is notified will not control the applicable final registration date. When necessary to ensure the fair and orderly allocation of numbers under section 214(g)(1)(A) of the Act, USCIS may randomly select the remaining number of registrations for unique beneficiaries deemed necessary to meet the H–1B regular cap from among the registrations received on the final registration date. This random selection will be made via computergenerated selection, based on the unique beneficiary. (ii) Sufficient registrations to meet the H–1B regular cap during initial registration period. At the end of the initial registration period, if USCIS E:\FR\FM\23OCP3.SGM 23OCP3 lotter on DSK11XQN23PROD with PROPOSALS3 Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules determines that it has received more than sufficient registrations for unique beneficiaries to meet the H–1B regular cap, USCIS will no longer accept registrations under section 214(g)(1)(A) of the Act and will notify the public of the final registration date. USCIS will randomly select from among the registrations properly submitted during the initial registration period the number of registrations for unique beneficiaries deemed necessary to meet the H–1B regular cap. This random selection will be made via computergenerated selection, based on the unique beneficiary. (6) * * * (i) Fewer registrations than needed to meet the H–1B advanced degree exemption numerical limitation. If USCIS determines that it has received fewer registrations for unique beneficiaries than needed to meet the H–1B advanced degree exemption numerical limitation, USCIS will notify all petitioners that have properly registered that their registrations have been selected. USCIS will continue to accept registrations to file petitions for beneficiaries that may be eligible for the H–1B advanced degree exemption under section 214(g)(5)(C) of the Act until USCIS determines that it has received enough registrations for unique beneficiaries to meet the H–1B advanced degree exemption numerical limitation. USCIS will monitor the number of registrations received and will notify the public of the date that USCIS has received the necessary number of registrations for unique beneficiaries (the ‘‘final registration date’’). The day the public is notified will not control the applicable final registration date. When necessary to ensure the fair and orderly allocation of numbers under sections 214(g)(1)(A) and 214(g)(5)(C) of the Act, USCIS may randomly select the remaining number of registrations for unique beneficiaries deemed necessary to meet the H–1B advanced degree exemption numerical limitation from among the registrations properly submitted on the final registration date. This random selection will be made via computer-generated selection, based on the unique beneficiary. (ii) Sufficient registrations to meet the H–1B advanced degree exemption numerical limitation. If USCIS determines that it has received more than enough registrations for unique beneficiaries to meet the H–1B advanced degree exemption numerical limitation, USCIS will no longer accept registrations that may be eligible for exemption under section 214(g)(5)(C) of the Act and will notify the public of the VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 final registration date. USCIS will randomly select the number of registrations for unique beneficiaries needed to meet the H–1B advanced degree exemption numerical limitation from among the remaining registrations for unique beneficiaries who may be counted against the advanced degree exemption numerical limitation. This random selection will be made via computer-generated selection, based on the unique beneficiary. (7) Increase to the number of beneficiaries projected to meet the H–1B regular cap or advanced degree exemption allocations in a fiscal year. Unselected registrations will remain on reserve for the applicable fiscal year. If USCIS determines that it needs to increase the number of registrations for unique beneficiaries projected to meet the H–1B regular cap or advanced degree exemption allocation, and select additional registrations for unique beneficiaries, USCIS will select from among the registrations that are on reserve a sufficient number to meet the H–1B regular cap or advanced degree exemption numerical limitation, as applicable. If all of the registrations on reserve are selected and there are still fewer registrations than needed to meet the H–1B regular cap or advanced degree exemption numerical limitation, as applicable, USCIS may reopen the applicable registration period until USCIS determines that it has received a sufficient number of registrations for unique beneficiaries projected as needed to meet the H–1B regular cap or advanced degree exemption numerical limitation. USCIS will monitor the number of registrations received and will notify the public of the date that USCIS has received the necessary number of registrations (the new ‘‘final registration date’’). The day the public is notified will not control the applicable final registration date. When necessary to ensure the fair and orderly allocation of numbers, USCIS may randomly select the remaining number of registrations for unique beneficiaries deemed necessary to meet the H–1B regular cap or advanced degree exemption numerical limitation from among the registrations properly submitted on the final registration date. If the registration period will be re-opened, USCIS will announce the start of the re-opened registration period on the USCIS website at www.uscis.gov. * * * * * (D) H–1B cap-subject petition filing following registration—(1) Filing procedures. In addition to any other applicable requirements, a petitioner may file an H–1B petition for a PO 00000 Frm 00093 Fmt 4701 Sfmt 4702 72961 beneficiary who may be counted under section 214(g)(1)(A) or eligible for exemption under section 214(g)(5)(C) of the Act only if the petition is based on a valid registration, which means that the registration was properly submitted in accordance with 8 CFR 103.2(a)(1), paragraph (h)(8)(iii) of this section, and the registration tool instructions, and was submitted by the petitioner, or its designated representative, on behalf of the beneficiary who was selected for that cap season by USCIS. A petitioner may not substitute the beneficiary named in the original registration or transfer the registration to another petitioner. Any H–1B petition filed on behalf of a beneficiary must contain and be supported by the same identifying information provided in the selected registration. Petitioners must submit evidence of the passport used at the time of registration to identify the beneficiary. In its discretion, USCIS may find that a change in identifying information in some circumstances would be permissible. Such circumstances could include, but are not limited to, a legal name change due to marriage, change in gender identity, or a change in passport number or expiration date due to renewal or replacement of a stolen passport, in between the time of registration and filing the petition. USCIS may deny or revoke the approval of an H–1B petition that does not meet these requirements. (2) Registration fee. USCIS may deny or revoke the approval of an H–1B petition if it determines that the fee associated with the registration is declined, not reconciled, disputed, or otherwise invalid after submission. The registration fee is non-refundable and due at the time the registration is submitted. (3) Filing period. An H–1B cap-subject petition must be properly filed within the filing period indicated on the relevant selection notice. The filing period for filing the H–1B cap-subject petition will be at least 90 days. If petitioners do not meet the requirements of this paragraph (h)(8)(iii)(D), USCIS may deny or reject the H–1B cap-subject petition. (E) Calculating the number of registrations needed to meet the H–1B regular cap and H–1B advanced degree exemption allocation. When calculating the number of registrations for unique beneficiaries needed to meet the H–1B regular cap and the H–1B advanced degree exemption numerical limitation for a given fiscal year, USCIS will take into account historical data related to approvals, denials, revocations, and other relevant factors. If necessary, E:\FR\FM\23OCP3.SGM 23OCP3 lotter on DSK11XQN23PROD with PROPOSALS3 72962 Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules USCIS may increase those numbers throughout the fiscal year. (F) * * * (2) * * * (iv) The nonprofit entity has entered into a formal written affiliation agreement with an institution of higher education that establishes an active working relationship between the nonprofit entity and the institution of higher education for the purposes of research or education, and a fundamental activity of the nonprofit entity is to directly contribute to the research or education mission of the institution of higher education. A nonprofit entity may engage in more than one fundamental activity. * * * * * (4) An H–1B beneficiary who is not directly employed by a qualifying institution, organization, or entity identified in section 214(g)(5)(A) or (B) of the Act will qualify for an exemption under such section if the H–1B beneficiary will spend at least half of their work time performing job duties at a qualifying institution, organization, or entity and those job duties directly further an activity that supports or advances one of the fundamental purposes, missions, objectives, or functions of the qualifying institution, organization, or entity, namely, either higher education, nonprofit research, or government research. Work performed ‘‘at’’ the qualifying institution may include work performed in the United States through telework, remote work, or other off-site work. When considering whether a position is cap-exempt, USCIS will focus on the job duties to be performed, rather than where the duties are physically performed. * * * * * (9) * * * (i) Approval. (A) USCIS will consider all the evidence submitted and any other evidence independently required to assist in adjudication. USCIS will notify the petitioner of the approval of the petition on a Notice of Action. The approval notice will include the beneficiary’s (or beneficiaries’) name(s) and classification and the petition’s period of validity. A petition for more than one beneficiary and/or multiple services may be approved in whole or in part. The approval notice will cover only those beneficiaries approved for classification under section 101(a)(15)(H) of the Act. (B) Where an H–1B petition is approved for less time than requested on the petition, the approval notice will provide or be accompanied by a brief explanation for the validity period granted. VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 (ii) * * * (D)(1) If an H–1B petition is adjudicated and deemed approvable after the initially requested validity period end-date or end-date for which eligibility is established, the officer may issue a request for evidence (RFE) asking the petitioner whether they want to update the requested dates of employment. Factors that inform whether USCIS issues an RFE could include, but would not be limited to: additional petitions filed or approved on the beneficiary’s behalf, or the beneficiary’s eligibility for additional time in H–1B status. If the new requested period exceeds the validity period of the labor condition application already submitted with the H–1B petition, the petitioner must submit a certified labor condition application with a new validity period that properly corresponds to the new requested validity period on the petition and an updated prevailing or proffered wage, if applicable, except that the petitioner may not reduce the proffered wage from that originally indicated in their petition. This labor condition application may be certified after the date the H–1B petition was filed with USCIS. The request for new dates of employment and submission of a labor condition application corresponding with the new dates of employment, absent other changes, will not be considered a material change. An increase to the proffered wage will not be considered a material change, as long as there are no other material changes to the position. (2) If USCIS does not issue an RFE concerning the requested dates of employment, if the petitioner does not respond, or the RFE response does not support new dates of employment, the petition will be approved, if otherwise approvable, for the originally requested period or until the end-date eligibility has been established, as appropriate. However, the petition will not be forwarded to the Department of State nor will any accompanying request for a change of status, an extension of stay, or amendment of stay, be granted. (iii) * * * (E) H–1B petition for certain beneficiary-owned entities. The initial approval of a petition filed by a United States employer in which the H–1B beneficiary possesses a controlling ownership interest in the petitioning organization or entity will be limited to a validity period of up to 18 months. The first extension (including an amended petition with a request for an extension of stay) of such a petition will PO 00000 Frm 00094 Fmt 4701 Sfmt 4702 also be limited to a validity period of up to 18 months. * * * * * (10) * * * (ii) Denial for statement of facts on the petition, H–1B registration, temporary labor certification, labor condition application, or invalid H–1B registration. The petition will be denied if it is determined that the statements on the petition, H–1B registration (if applicable), the application for a temporary labor certification, or the labor condition application, were inaccurate, fraudulent, or misrepresented a material fact, including if the attestations on the registration are determined to be false. An H–1B cap-subject petition also will be denied if it is not based on a valid registration submitted by the petitioner (or its designated representative), or a successor in interest, for the beneficiary named or identified in the petition. (iii) Notice of denial. The petitioner will be notified of the reasons for the denial and of the right to appeal the denial of the petition under 8 CFR part 103. There is no appeal from a decision to deny an extension of stay to the alien. (11) * * * (ii) Immediate and automatic revocation. The approval of any petition is immediately and automatically revoked if the petitioner goes out of business, files a written withdrawal of the petition, or the Department of Labor revokes the labor certification upon which the petition is based. The approval of an H–1B petition is also immediately and automatically revoked upon notification from the H–1B petitioner that the beneficiary is no longer employed. (iii) * * * (A) * * * (2) The statement of facts contained in the petition, H–1B registration (if applicable), the application for a temporary labor certification, or the labor condition application, was not true and correct, inaccurate, fraudulent, or misrepresented a material fact, including if the attestations on the registration are determined to be false; or * * * * * (5) The approval of the petition violated paragraph (h) of this section or involved gross error; (6) The H–1B cap-subject petition was not based on a valid registration submitted by the petitioner (or its designated representative), or a successor in interest, for the beneficiary named or identified in the petition; or (7) The petitioner failed to timely file an amended petition notifying USCIS of E:\FR\FM\23OCP3.SGM 23OCP3 Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 / Proposed Rules lotter on DSK11XQN23PROD with PROPOSALS3 a material change or otherwise failed to comply with the material change reporting requirements in paragraph (h)(2)(i)(E) of this section. * * * * * (14) Extension of visa petition validity. The petitioner must file a request for a petition extension on the Form I–129 to extend the validity of the original petition under section 101(a)(15)(H) of the Act. A request for a petition extension generally may be filed only if the validity of the original petition has not expired. * * * * * (19) * * * (iii) * * * (B) * * * (4) The nonprofit entity has entered into a formal written affiliation agreement with an institution of higher education that establishes an active working relationship between the nonprofit entity and the institution of higher education for the purposes of research or education, and a fundamental activity of the nonprofit entity is to directly contribute to the research or education mission of the institution of higher education. A nonprofit entity may engage in more than one fundamental activity. (C) A nonprofit research organization or government research organization. When a fundamental activity of a nonprofit organization is engaging in basic research and/or applied research, that organization is a nonprofit research organization. When a fundamental activity of a governmental organization is the performance or promotion of basic research and/or applied research, that organization is a government research organization. A governmental research VerDate Sep<11>2014 19:04 Oct 20, 2023 Jkt 262001 organization may be a Federal, state, or local entity. A nonprofit research organization or governmental research organization may perform or promote more than one fundamental activity. Basic research is general research to gain more comprehensive knowledge or understanding of the subject under study, without specific applications in mind. Basic research is also research that advances scientific knowledge but does not have specific immediate commercial objectives although it may be in fields of present or potential commercial interest. Applied research is research to gain knowledge or understanding to determine the means by which a specific, recognized need may be met. Applied research includes investigations oriented to discovering new scientific knowledge that has specific commercial objectives with respect to products, processes, or services. Both basic research and applied research may include research and investigation in the sciences, social sciences, or humanities and may include designing, analyzing, and directing the research of others if on an ongoing basis and throughout the research cycle. * * * * * (iv) Nonprofit or tax-exempt organizations. For purposes of paragraphs (h)(19)(iii)(B) and (C) of this section, a nonprofit organization or entity must be determined by the Internal Revenue Service as a tax exempt organization under the Internal Revenue Code of 1986, section 501(c)(3), (c)(4), or (c)(6), 26 U.S.C. 501(c)(3), (c)(4), or (c)(6). * * * * * PO 00000 Frm 00095 Fmt 4701 Sfmt 9990 72963 (l) * * * (14) * * * (i) Individual petition. The petitioner must file a petition extension on Form I–129 to extend an individual petition under section 101(a)(15)(L) of the Act. A petition extension generally may be filed only if the validity of the original petition has not expired. * * * * * (o) * * * (11) Extension of visa petition validity. The petitioner must file a request to extend the validity of the original petition under section 101(a)(15)(O) of the Act on the form prescribed by USCIS, in order to continue or complete the same activities or events specified in the original petition. A petition extension generally may be filed only if the validity of the original petition has not expired. * * * * * (p) * * * (13) Extension of visa petition validity. The petitioner must file a request to extend the validity of the original petition under section 101(a)(15)(P) of the Act on the form prescribed by USCIS in order to continue or complete the same activity or event specified in the original petition. A petition extension generally may be filed only if the validity of the original petition has not expired. * * * * * Alejandro N. Mayorkas, Secretary, U.S. Department of Homeland Security. [FR Doc. 2023–23381 Filed 10–20–23; 8:45 am] BILLING CODE 9111–97–P E:\FR\FM\23OCP3.SGM 23OCP3

Agencies

DEPARTMENT OF HOMELAND SECURITY

[Federal Register Volume 88, Number 203 (Monday, October 23, 2023)]
[Proposed Rules]
[Pages 72870-72963]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-23381]

[[Page 72869]]

Vol. 88

Monday,

No. 203

October 23, 2023

Part III

Department of Homeland Security

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8 CFR Part 214

Modernizing H-1B Requirements, Providing Flexibility in the F-1
Program, and Program Improvements Affecting Other Nonimmigrant Workers;
Proposed Rule

Federal Register / Vol. 88 , No. 203 / Monday, October 23, 2023 /
Proposed Rules

[[Page 72870]]

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DEPARTMENT OF HOMELAND SECURITY

8 CFR Part 214

[CIS No. 2745-23; DHS Docket No. USCIS-2023-0005]
RIN 1615-AC70

Modernizing H-1B Requirements, Providing Flexibility in the F-1
Program, and Program Improvements Affecting Other Nonimmigrant Workers

AGENCY: U.S. Citizenship and Immigration Services, DHS.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The U.S. Department of Homeland Security (DHS) proposes to
amend its regulations governing H-1B specialty occupation workers to
modernize and improve the efficiency of the H-1B program, add benefits
and flexibilities, and improve integrity measures. Some of the proposed
provisions would narrowly impact other nonimmigrant classifications,
including: H-2, H-3, F-1, L-1, O, P, Q-1, R-1, E-3, and TN. DHS intends
to finalize the proposals contained in this rulemaking through one or
more final rules, depending on agency resources.

DATES: Written comments must be submitted on or before December 22,
2023.

ADDRESSES: You may submit comments on the entirety of this proposed
rulemaking package, identified by DHS Docket No. USCIS-2023-0005
through the Federal eRulemaking Portal: https://www.regulations.gov.
Follow the website instructions for submitting comments. The electronic
Federal Docket Management System will accept comments before midnight
Eastern time on December 22, 2023.
Comments submitted in a manner other than the one listed above,
including emails or letters sent to DHS or USCIS officials, will not be
considered comments on the proposed rule and may not receive a response
from DHS. Please note that DHS and USCIS cannot accept any comments
that are hand-delivered or couriered. In addition, DHS and USCIS cannot
accept comments contained on any form of digital media storage devices,
such as CDs/DVDs and USB drives. USCIS is also not accepting mailed
comments at this time. If you cannot submit your comment by using
https://www.regulations.gov, please contact Samantha Deshommes, Chief,
Regulatory Coordination Division, Office of Policy and Strategy, U.S.
Citizenship and Immigration Services, U.S. Department of Homeland
Security, by telephone at (240) 721-3000 for alternate instructions.

FOR FURTHER INFORMATION CONTACT: Charles L. Nimick, Chief, Business and
Foreign Workers Division, Office of Policy and Strategy, U.S.
Citizenship and Immigration Services, U.S. Department of Homeland
Security, 5900 Capital Gateway Drive, Camp Springs, MD 20746; telephone
(240) 721-3000.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Public Participation
II. Executive Summary
A. Purpose of the Regulatory Action
B. Summary of the Major Provisions of the Regulatory Action
1. Modernization and Efficiencies
2. Benefits and Flexibilities
3. Program Integrity
C. Summary of Costs and Benefits
D. Request for Preliminary Public Input
E. Future Rulemaking Actions
III. Background and Purpose
A. Legal Authority
B. Background
1. The H-1B Program
2. The F-1 Program
IV. Discussion of the Proposed Rule
A. Modernization and Efficiencies
1. Amending the Definition of a ``Specialty Occupation''
2. Amending the Criteria for Specialty Occupation Positions
3. Amended Petitions
4. Deference
5. Evidence of Maintenance of Status
6. Eliminating the Itinerary Requirement for H Programs
7. Validity Expires Before Adjudication
B. Benefits and Flexibilities
1. H-1B Cap Exemptions
2. Automatic Extension of Authorized Employment Under 8 CFR
214.2(f)(5)(vi) (Cap-Gap)
3. Start Date Flexibility for Certain H-1B Cap-Subject Petitions
C. Program Integrity
1. The H-1B Registration System
2. Beneficiary Centric Selection
3. Bar on Multiple Registrations Submitted by Related Entities
4. Registrations With False Information or That Are Otherwise
Invalid
5. Alternatives Considered
6. Provisions To Ensure Bona Fide Job Offer for a Specialty
Occupation Position
a. Contracts
b. Non-Speculative Employment
c. LCA Corresponds With the Petition
d. Revising the Definition of U.S. Employer
e. Employer-Employee Relationship
f. Bona Fide Job Offer
g. Legal Presence and Amenable to Service of Process
7. Beneficiary-Owners
8. Site Visits
9. Third-Party Placement (Codifying Defensor)
D. Request for Preliminary Public Input Related to Future
Actions/Proposals
1. Use or Lose
2. Beneficiary Notification
E. Potential Publication of One or More Final Rules
F. Severability
V. Statutory and Regulatory Requirements
A. Executive Order 12866 (Regulatory Planning and Review) and
Executive Order 13563 (Improving Regulation and Regulatory Review)
1. Summary
2. Background
3. Costs, Transfers, and Benefits of the Proposed Rule
a. Amended Petitions
b. Deference to Prior USCIS Determinations of Eligibility in
Requests for Extensions of Petition Validity
c. Evidence of Maintenance of Status
d. Eliminating the Itinerary Requirement for H Programs
e. Validity Period Expires Before Adjudication
f. H-1B Cap Exemptions
g. Automatic Extension of Authorized Employment ``Cap-Gap''
h. Start Date Flexibility for Certain H-1B Cap-Subject Petitions
i. The H-1B Registration System
j. Beneficiary Centric Selection
k. Bar on Multiple Registrations Submitted by Related Entities
l. Registrations With False Information or That Are Otherwise
Invalid
m. Provisions To Ensure Bona Fide Job Offer for a Specialty
Occupation Position
(1) Contracts
(2) Non-Speculative Employment
(3) LCA Corresponds With the Petition
(4) Revising the Definition of U.S. Employer
(5) Employer-Employee Relationship
n. Beneficiary-Owners
o. Site Visits
p. Third-Party Placement (Codifying Defensor)
q. Additional Time Burden for Form I-129 H-1B
r. Additional Time Burden for H Classification Supplement to
Form I-129
4. Alternatives Considered
5. Total Quantified Net Costs of the Proposed Regulatory Changes
B. Regulatory Flexibility Act (RFA)
1. Initial Regulatory Flexibility Analysis
a. A Description of the Reasons Why the Action by the Agency Is
Being Considered
b. A Statement of the Objectives of, and Legal Basis for, the
Proposed Rule
c. A Description and, Where Feasible, an Estimate of the Number
of Small Entities to Which the Proposed Changes Would Apply
d. A Description of the Projected Reporting, Recordkeeping, and
Other Compliance Requirements of the Proposed Rule, Including an
Estimate of the Classes of Small Entities That Will Be Subject to
the Requirement and the Types of Professional Skills
e. An Identification of All Relevant Federal Rules, to the
Extent Practical, That May Duplicate, Overlap, or Conflict With the
Proposed Rule
f. A Description of Any Significant Alternatives to the Proposed
Rule That Accomplish the Stated Objectives of

[[Page 72871]]

Applicable Statutes and That Minimize any Significant Economic
Impact of the Proposed Rule on Small Entities
C. Unfunded Mandates Reform Act of 1995 (UMRA)
D. Congressional Review Act
E. Executive Order 13132 (Federalism)
F. Executive Order 12988: Civil Justice Reform
G. Executive Order 13175 (Consultation and Coordination With
Indian Tribal Governments)
H. National Environmental Policy Act (NEPA)
I. Paperwork Reduction Act

Table of Abbreviations

AAO--Administrative Appeals Office
AC21--American Competitiveness in the Twenty-first Century Act
ACWIA--American Competitiveness and Workforce Improvement Act of
1998
BLS--Bureau of Labor Statistics
CEQ--Council on Environmental Quality
CFR--Code of Federal Regulations
CMSA--Consolidated Metropolitan Statistical Area
COS--Change of Status
CPI-U--Consumer Price Index for All Urban Consumers
D/S--Duration of status
DHS--U.S. Department of Homeland Security
DOL--U.S. Department of Labor
DOS--U.S. Department of State
FDNS--Fraud Detection and National Security
FR--Federal Register
FY--Fiscal Year
HR--Human Resources
HSA--Homeland Security Act of 2002
ICE--Immigration and Customs Enforcement
IMMACT 90--Immigration Act of 1990
INA--Immigration and Nationality Act
INS--legacy Immigration and Naturalization Service
IRFA--Initial Regulatory Flexibility Analysis
IRS--Internal Revenue Service
LCA--Labor Condition Application
MSA--Metropolitan Statistical Area
NAICS--North American Industry Classification System
NEPA--National Environmental Policy Act
NOID--Notice of Intent to Deny
NPRM--Notice of proposed rulemaking
OIRA--Office of Information and Regulatory Affairs
OMB--Office of Management and Budget
OP&S--Office of Policy and Strategy
OPT--Optional Practical Training
PM--Policy Memorandum
PMSA--Primary Metropolitan Statistical Area
PRA--Paperwork Reduction Act PRD--Policy Research Division
Pub. L.--Public Law
RFA--Regulatory Flexibility Act of 1980
RFE--Request for Evidence RIA--Regulatory Impact Analysis
RIN--Regulation Identifier Number
SBA--Small Business Administration
SEVP--Student and Exchange Visitor Program
SOC--Standard Occupational Classification
Stat.--U.S. Statutes at Large
TLC--Temporary Labor Certification
UMRA--Unfunded Mandates Reform Act
U.S.C.--United States Code
USCIS--U.S. Citizenship and Immigration Services

I. Public Participation

DHS invites all interested parties to participate in this
rulemaking by submitting written data, views, comments, and arguments
on all aspects of this proposed rule. DHS also invites comments that
relate to the economic, environmental, or federalism effects that might
result from this proposed rule. Comments must be submitted in English,
or an English translation must be provided. Comments that will provide
the most assistance to USCIS in implementing these changes will
reference a specific portion of the proposed rule, explain the reason
for any recommended change, and include data, information, or authority
that support such recommended change. Comments submitted in a manner
other than the one listed above, including emails or letters sent to
DHS or USCIS officials, will not be considered comments on the proposed
rule and may not receive a response from DHS.
Instructions: If you submit a comment, you must include the agency
name (U.S. Citizenship and Immigration Services) and the DHS Docket No.
USCIS-2023-0005 for this rulemaking. Please note all submissions will
be posted, without change, to the Federal eRulemaking Portal at https://www.regulations.gov, and will include any personal information you
provide. Therefore, submitting this information makes it public. You
may wish to consider limiting the amount of personal information that
you provide in any voluntary public comment submission you make to DHS.
DHS may withhold information provided in comments from public viewing
that it determines may impact the privacy of an individual or is
offensive. For additional information, please read the Privacy and
Security Notice available at https://www.regulations.gov.
Docket: For access to the docket and to read background documents
or comments received, go to https://www.regulations.gov, referencing
DHS Docket No. USCIS-2023-0005. You may also sign up for email alerts
on the online docket to be notified when comments are posted or a final
rule is published.

II. Executive Summary

A. Purpose of the Regulatory Action

The purpose of this rulemaking is to modernize and improve the
regulations relating to the H-1B program by: (1) streamlining the
requirements of the H-1B program and improving program efficiency; (2)
providing greater benefits and flexibilities for petitioners and
beneficiaries; and (3) improving integrity measures. Some of the
proposed provisions would narrowly impact other nonimmigrant
classifications.

B. Summary of the Major Provisions of the Regulatory Action

1. Modernization and Efficiencies
DHS proposes to streamline requirements for the H-1B program by:
(1) revising the regulatory definition and criteria for a ``specialty
occupation''; (2) clarifying that ``normally'' does not mean ``always''
within the criteria for a specialty occupation; and (3) clarifying that
a position may allow a range of degrees, although there must be a
direct relationship between the required degree field(s) and the duties
of the position. As 21st century employers strive to generate better
hiring outcomes, improving the match between required skills and job
duties, employers have increasingly become more aware of a skills-first
culture, led by the Federal Government's commitment to attract and hire
individuals well-suited to available jobs.\1\ The flexibility inherent
in H-1B adjudications to identify job duties and particular positions
where a bachelor's or higher degree in a specific specialty, or its
equivalent, is normally required, allows employers to explore where
skills-based hiring is sensible.
---------------------------------------------------------------------------

\1\ See, e.g., U.S. Office of Personnel Management, Memorandum
for Heads of Executive Departments and Agencies: ``Guidance
Release--E.O. 13932; Modernizing and Reforming the Assessment and
Hiring of Federal Job Candidates'' (May 19, 2022), https://chcoc.gov/content/guidance-release-eo-13932-modernizing-and-reforming-assessment-and-hiring-federal-job.
---------------------------------------------------------------------------

DHS also proposes to clarify when an amended or new petition must
be filed due to a change in an H-1B worker's place of employment to be
consistent with current policy guidance.
Additionally, DHS proposes to codify and clarify its deference
policy to state that, if there has been no material change in the
underlying facts, adjudicators generally should defer to a prior
determination involving the same parties and underlying facts. DHS also
proposes to update the regulations to expressly require that evidence
of maintenance of status must be included with the petition if a
beneficiary is seeking an extension or amendment of stay. This policy
would impact all employment-based nonimmigrant classifications that use
Form I-129,

[[Page 72872]]

Petition for Nonimmigrant Worker. DHS further proposes to eliminate the
itinerary requirement, which would apply to all H classifications, and
allow petitioners to amend requested validity periods where the
validity expires before adjudication.
2. Benefits and Flexibilities
DHS proposes to modernize the definition of employers who are
exempt from the annual statutory limit on H-1B visas to create more
flexibility for nonprofit and governmental research organizations and
beneficiaries who are not directly employed by a qualifying
organization. Specifically, DHS proposes to change the definition of
``nonprofit research organization'' and ``governmental research
organization'' by replacing ``primarily engaged'' and ``primary
mission'' with ``fundamental activity'' to permit a nonprofit entity or
governmental research organization that conducts research as a
fundamental activity, but is not primarily engaged in research or where
research is not a primary mission, to meet the definition of a
nonprofit research entity. Additionally, DHS proposes to revise the
requirements for beneficiaries to qualify for H-1B cap exemption when
they are not directly employed by a qualifying organization, but still
provide essential work, even if their duties do not necessarily
directly further the organization's essential purpose.
DHS also proposes to provide flexibilities, such as automatically
extending the duration of F-1 status, and any employment authorization
granted under 8 CFR 274a.12(c)(3)(i)(B) or (C), until April 1 of the
relevant fiscal year, rather than October 1 of the same fiscal year, to
avoid disruptions in lawful status and employment authorization for F-1
students changing their status to H-1B. Additionally, DHS is proposing
to clarify the requirements regarding the requested employment start
date on H-1B cap-subject petitions to permit filing with requested
start dates that are after October 1 of the relevant fiscal year,
consistent with current USCIS policy.
3. Program Integrity
DHS proposes to address H-1B cap registration abuse by changing the
way USCIS selects registrations. Instead of selecting by registration,
USCIS would select registrations by unique beneficiary, thereby
reducing the potential for gaming the process to increase chances for
selection and helping ensure that each beneficiary would have the same
chance of being selected, regardless of how many registrations are
submitted on their behalf. DHS also proposes to clarify that related
entities are prohibited from submitting multiple registrations for the
same beneficiary, similar to the prohibition on related entities filing
multiple cap-subject petitions for the same beneficiary for the same
fiscal year's numerical allocations. Additionally, DHS proposes to
codify USCIS's ability to deny H-1B petitions or revoke an approved H-
1B petition where the underlying registration contained a false
attestation or was otherwise invalid.
DHS further proposes to improve the integrity of the H-1B program
by: (1) codifying its authority to request contracts; (2) requiring
that the petitioner establish that it has an actual, non-speculative
position in a specialty occupation available for the beneficiary as of
the requested start date; (3) ensuring that the labor condition
application (LCA) properly supports and corresponds with the petition;
(4) revising the definition of ``United States employer'' by codifying
the existing requirement that the petitioner has a bona fide job offer
for the beneficiary to work within the United States as of the
requested start date, consistent with current DHS policy; and (5)
adding a requirement that the petitioner have a legal presence and be
amenable to service of process in the United States.
DHS additionally proposes to clarify that beneficiary-owners may be
eligible for H-1B status, while setting reasonable conditions for when
the beneficiary owns a controlling interest in the petitioning entity.
DHS also proposes to codify USCIS's authority to conduct site
visits and clarify that refusal to comply with site visits may result
in denial or revocation of the petition. Additionally, DHS proposes to
clarify that if an H-1B worker will be staffed to a third party,
meaning they will be contracted to fill a position in the third party's
organization, it is the requirements of that third party, and not the
petitioner, that are most relevant when determining whether the
position is a specialty occupation. Through these provisions, DHS aims
to prevent fraud and abuse and maintain H-1B program integrity.

C. Summary of Costs and Benefits

As discussed in the preamble, the purpose of this rulemaking is to
modernize and improve the regulations relating to the H-1B program by:
(1) streamlining H-1B program requirements and improving program
efficiency; (2) providing greater benefits and flexibilities for
petitioners and beneficiaries; and (3) improving integrity measures.
For the 10-year period of analysis of the proposed rule, DHS
estimates the annualized net costs of this rulemaking would be
$6,339,779 annualized at 3 percent and 7 percent. Table 12 provides a
more detailed summary of the proposed rule provisions and their
impacts.

D. Request for Preliminary Public Input

Finally, DHS is requesting preliminary public input on ideas that
would curb or eliminate the possibility that petitioners may have
speculative job opportunities as of the requested start date and delay
admission of H-1B beneficiaries until the petitioner has secured work
for the H-1B beneficiary, including two potential approaches DHS is
considering for future action. DHS is also seeking preliminary public
input on ways to provide H-1B and other Form I-129 beneficiaries with
notice of USCIS actions taken on petitions filed on their behalf.

E. Future Rulemaking Actions

After carefully considering any public comments received on the
proposals in this NPRM, DHS may move to finalize the proposed
provisions through one or more final rules, and may possibly do so in
time for the fiscal year (FY) 2025 cap season, depending on agency
resources.

III. Background and Purpose

A. Legal Authority

The Secretary of Homeland Security's authority for these proposed
regulatory amendments is found in various sections of the Immigration
and Nationality Act (INA or the Act), 8 U.S.C. 1101 et seq., and the
Homeland Security Act of 2002 (HSA), Public Law 107-296, 116 Stat.
2135, 6 U.S.C. 101 et seq. General authority for issuing this proposed
rule is found in section 103(a) of the INA, 8 U.S.C. 1103(a), which
authorizes the Secretary to administer and enforce the immigration and
nationality laws and establish such regulations as the Secretary deems
necessary for carrying out such authority, as well as section 112 of
the HSA, 6 U.S.C. 112, which vests all of the functions of DHS in the
Secretary and authorizes the Secretary to issue regulations.\2\ Further
authority for these regulatory amendments is found in:
---------------------------------------------------------------------------

\2\ Although several provisions of the INA discussed in this
NPRM refer exclusively to the ``Attorney General,'' such provisions
are now to be read as referring to the Secretary of Homeland
Security by operation of the HSA. See 6 U.S.C. 202(3), 251, 271(b),
542 note, 557; 8 U.S.C. 1103(a)(1), (g), 1551 note; Nielsen v.
Preap, 139 S. Ct. 954, 959 n.2 (2019).
---------------------------------------------------------------------------

Section 101(a)(15) of the INA, 8 U.S.C. 1101(a)(15), which
establishes

[[Page 72873]]

classifications for noncitizens who are coming temporarily to the
United States as nonimmigrants, including the H-1B classification, see
INA section 101(a)(15)(H)(i)(b), 8 U.S.C. 1101(a)(15)(H)(i)(b);
Section 214(a)(1) of the INA, 8 U.S.C. 1184(a)(1), which
authorizes the Secretary to prescribe, by regulation, the time and
conditions of the admission of nonimmigrants;
Section 214(c) of the INA, 8 U.S.C. 1184(c), which, inter
alia, authorizes the Secretary to prescribe how an importing employer
may petition for nonimmigrant workers, including certain nonimmigrants
described at sections 101(a)(a)(15)(H), (L), (O), and (P), 8 U.S.C.
1101(a)(15)(H), (L), (O), and (P); the information that an importing
employer must provide in the petition; and certain fees that are
required for certain nonimmigrant petitions;
Section 214(e) of the INA, 8 U.S.C. 1184(e), which
provides for the admission of citizens of Canada or Mexico as TN
nonimmigrants;
Section 214(g) of the INA, 8 U.S.C. 1184(g), which, inter
alia, prescribes the H-1B numerical limitations, various exceptions to
those limitations, and the period of authorized admission for H-1B
nonimmigrants;
Section 214(i) of the INA, 8 U.S.C. 1184(i), which sets
forth the definition and requirements of a ``specialty occupation'';
Section 235(d)(3) of the INA, 8 U.S.C. 1225(d)(3) (``any
immigration officer shall have the power to administer oaths and to
take and consider evidence of or from any person touching the privilege
of any alien or person he believes or suspects to be an alien to enter,
reenter, transit through, or reside in the United States or concerning
any matter which is material and relevant to the enforcement of this
chapter and the administration of the Service.'');
Section 248 of the INA, 8 U.S.C. 1258, which authorizes a
noncitizen to change from any nonimmigrant classification to any other
nonimmigrant classification (subject to certain exceptions) if the
noncitizen was lawfully admitted to the United States as a nonimmigrant
and is continuing to maintain that status, and is not otherwise subject
to the 3- or 10-year bar applicable to certain noncitizens who were
unlawfully present in the United States;
Section 274A of the INA, 8 U.S.C. 1324a, which recognizes
the Secretary's authority to extend employment authorization to
noncitizens in the United States;
Section 287(b) of the INA, 8 U.S.C. 1357(b), which
authorizes the taking and consideration of evidence concerning any
matter that is material or relevant to the enforcement of the INA;
Section 402 of the Homeland Security Act of 2002 (HSA),
Public Law 107-296, 116 Stat. 2135, 6 U.S.C. 202, which charges the
Secretary with ``[e]stablishing and administering rules . . . governing
the granting of visas or other forms of permission . . . to enter the
United States'' and ``[e]stablishing national immigration enforcement
policies and priorities,'' id.; see also HSA sec. 428, 6 U.S.C. 236;
and
Section 451(a)(3) and (b) of the HSA, 6 U.S.C. 271(a)(3)
and (b), transferring to USCIS the authority to adjudicate petitions
for nonimmigrant status, establish policies for performing that
function, and set national immigration services policies and
priorities.

B. Background

1. The H-1B Program
The H-1B nonimmigrant visa program allows U.S. employers to
temporarily employ foreign workers in specialty occupations, defined by
statute as occupations that require the theoretical and practical
application of a body of highly specialized knowledge and a bachelor's
or higher degree in the specific specialty, or its equivalent. See INA
sections 101(a)(15)(H)(i)(b) and 214(i), 8 U.S.C 1101(a)(15)(H)(i)(b)
and 1184(i).
The Immigration Act of 1990 (Pub. L. 101-649) (IMMACT 90)
significantly reformed the H-1B program. To protect U.S. workers,
IMMACT 90 required a certified LCA by the Secretary of Labor as a
prerequisite for classification as an H-1B nonimmigrant. The LCA
requirement, and the associated obligations the employer must attest to
and comply with, including the prevailing or actual wage requirement,
were intended to safeguard the wages and working conditions of U.S.
workers.\3\ Through IMMACT 90, Congress set the current annual cap for
the H-1B visa category at 65,000,\4\ which limited the number of
beneficiaries who may be issued an initial H-1B visa or otherwise
provided initial H-1B status each fiscal year.\5\ Prior to IMMACT 90,
no limit existed on the number of initial H-1B visas that could be
granted each fiscal year. Congressional deliberations ahead of the
enactment of the American Competitiveness and Workforce Improvement Act
of 1998 (ACWIA) describe the H-1B program's purpose both as filling
shortages and creating opportunities for innovation and expansion.\6\
---------------------------------------------------------------------------

\3\ See U.S. Gov't Accountability Off., GAO/PEMD-92-17,
``Immigration and the Labor Market: Nonimmigrant Alien Workers in
the United States,'' at 18 (1992).
\4\ Up to 6,800 visas are set aside from the 65,000 each fiscal
year for the H-1B1 visa program under terms of the legislation
implementing the U.S.-Chile and U.S.-Singapore free trade
agreements. See INA sections 101(a)(15)(H)(i)(b1), 214(g)(8), 8
U.S.C. 1101(a)(15)(H)(i)(b1), 1184(g)(8).
\5\ The 65,000 annual H-1B numerical limitation was increased
for FYs 1999-2003. See INA section 214(g)(1)(A), 8 U.S.C.
1184(g)(1)(A), as amended by section 411 of the ACWIA, Public Law
105-277, div. C, tit. IV, 112 Stat. 2681, and the American
Competitiveness in the Twenty-first Century Act of 2000 (AC21),
Public Law 106-313, 114 Stat. 1251, as amended by the 21st Century
Department of Justice Appropriations Authorization Act, Public Law
107-273, 116 Stat. 1758 (2002). Subsequent to IMMACT 90, Congress
also created several exemptions from the 65,000 numerical
limitation. See INA section 214(g)(5), 8 U.S.C. 1184(g)(5).
\6\ See 144 Cong. Rec. at S12749 (statement of Sen. Abraham)
(``[T]his issue [of increasing H-1B visas] is not only about
shortages, it is about opportunities for innovation and
expansion.'').
---------------------------------------------------------------------------

Congress also set up several exemptions to the annual H-1B cap. For
example, workers who will be employed at an institution of higher
education (as defined in section 101(a) of the Higher Education Act of
1965, as amended) or a related or affiliated nonprofit entity, and
workers who will be employed at a nonprofit or governmental research
organization, are exempt from the cap. These exemptions are not
numerically capped. See INA section 214(g)(5)(A)-(B), 8 U.S.C.
1184(g)(5)(A)-(B). Congress further provided an exemption from the
numerical limits in INA section 214(g)(1)(A), 8 U.S.C. 1184(g)(1)(A),
for 20,000 new H-1B visas, or grants of initial H-1B status, each
fiscal year for foreign nationals who have earned a U.S. master's or
higher degree (``advanced degree exemption'').\7\ Cap exemptions are
discussed in more detail below.
---------------------------------------------------------------------------

\7\ See INA section 214(g)(5)(C), 8 U.S.C. 1184(g)(5)(C). This
rule also may refer to the 20,000 exemptions under section
214(g)(5)(C) from the H-1B regular cap as the ``advanced degree
exemption allocation'' or ``advanced degree exemption numerical
limitation.''
---------------------------------------------------------------------------

To manage the annual cap, USCIS used a random selection process in
years of high demand to determine which petitions were selected toward
the projected number of petitions needed to reach the annual H-1B
numerical allocations.\8\ In order to better manage the selection
process, DHS created a registration requirement for H-1B cap-subject
petitions, which was first implemented in 2020 for the FY 2021

[[Page 72874]]

cap season.\9\ Under the registration requirement, prospective
petitioners seeking to file H-1B cap-subject petitions (including
petitions filed on behalf of beneficiaries eligible for the advanced
degree exemption) must first electronically register and pay the
associated H-1B registration fee for each prospective beneficiary. The
random selection process is then conducted, selecting from the properly
submitted registrations the number of registrations projected as needed
to reach the numerical allocations.\10\ Only those prospective
petitioners with selected registrations are eligible to file H-1B cap-
subject petitions for the beneficiary(ies) named in their selected
registration(s). The electronic registration process has streamlined
the H-1B cap selection process by reducing paperwork and simplifying
data exchange, and has provided overall cost savings to employers
seeking to file H-1B cap-subject petitions and to USCIS. Prior to the
registration requirement, petitioners were required to prepare and file
complete H-1B petitions in order to be considered for the random
selection process.
---------------------------------------------------------------------------

\8\ See ``Registration Requirement for Petitioners Seeking To
File H-1B Petitions on Behalf of Cap-Subject Aliens,'' 84 FR 888
(Jan. 31, 2019).
\9\ Id.
\10\ See 8 CFR 214.2(h)(8)(iii).
---------------------------------------------------------------------------

2. The F-1 Program
Section 101(a)(15)(F)(i) of the INA, 8 U.S.C. 1101(a)(15)(F)(i),
permits bona fide students to be temporarily admitted to the United
States for the purpose of pursuing a full course of study at an
established college, university, seminary, conservatory, academic high
school, elementary school, or other academic institution or accredited
language training program. Principal applicants are categorized as F-1
nonimmigrants and their spouses and minor children may accompany or
follow to join them as F-2 dependents.\11\
---------------------------------------------------------------------------

\11\ See INA section 101(a)(15)(F)(i)-(ii), 8 U.S.C.
1101(a)(15)(F)(i)-(ii); 8 CFR 214.2(f)(3).
---------------------------------------------------------------------------

In 1992, legacy Immigration and Naturalization Services (INS)
amended its longstanding regulations relating to an employment program
for students called Optional Practical Training (OPT) such that
students in F-1 nonimmigrant status who have been enrolled on a full-
time basis for at least one full academic year in a college,
university, conservatory, or seminary (which now must be certified by
U.S. Immigration and Customs Enforcement's (ICE's) Student and Exchange
Visitor Program (SEVP)) are allowed up to 12 months of OPT to work for
a U.S. employer in a job directly related to the student's major area
of study.\12\ Employers of F-1 students already working for the
employer under OPT, would often file petitions to change the students'
status to H-1B so that these nonimmigrant students may continue working
in their current or a similar job.\13\ Many times, however, an F-1
student's OPT authorization would expire prior to the student being
able to assume the employment specified in the approved H-1B petition,
creating a gap in employment.\14\ In order to remedy this, in 2008, DHS
created the cap-gap extension to temporarily extend the period of
authorized stay, as well as work authorization, of certain F-1 students
caught in a gap between the end of their program and the start date on
their later-in-time approved, cap-subject H-1B petition.\15\ The cap-
gap extension provides a temporary bridge between F-1 and H-1B status,
allowing students to remain in the United States between the end of
their academic program and the beginning of the fiscal year, when the
student's H-1B status commences.\16\ DHS subsequently amended cap-gap
procedures by extending the authorized period of stay and work
authorization of any F-1 student who is the beneficiary of a timely
filed cap-subject H-1B petition that has been granted by, or remains
pending with, USCIS, until October 1 of the fiscal year for which H-1B
visa classification has been requested.\17\
---------------------------------------------------------------------------

\12\ See 8 CFR 214.2(f)(10); ``Pre-Completion Interval Training;
F-1 Student Work Authorization,'' 57 FR 31954 (July 20, 1992).
\13\ See ``Extending Period of Optional Practical Training by 17
Months for F-1 Nonimmigrant Students With STEM Degrees and Expanding
Cap-Gap Relief for All F-1 Students With Pending H-1B Petitions,''
73 FR 18944, 18947 (Apr. 8, 2008), vacated, Wash. All. of Tech.
Workers v. U.S. Dep't of Homeland Sec., 156 F. Supp. 3d 123 (D.D.C.
2015), which amended the cap-gap extension. Through this interim
final rule, DHS also made other amendments, such as eliminating the
requirement that USCIS issue a Federal Register Notice in order to
extend status for students with pending H-1B petitions. Although the
2008 rule was vacated, the cap-gap extension was reinstated through
``Improving and Expanding Training Opportunities for F-1
Nonimmigrant Students With STEM Degrees and Cap-Gap Relief for All
Eligible F-1 Students,'' 81 FR 13039 (Mar. 11, 2016).
\14\ Id.
\15\ Id.
\16\ See ``Improving and Expanding Training Opportunities for F-
1 Nonimmigrant Students With STEM Degrees and Cap-Gap Relief for All
Eligible F-1 Students,'' 81 FR 13039 (Mar. 11, 2016).
\17\ See ``Extending Period of Optional Practical Training by 17
Months for F-1 Nonimmigrant Students With STEM Degrees and Expanding
Cap-Gap Relief for All F-1 Students With Pending H-1B Petitions,''
74 FR 26514 (June 3, 2009) (correction); ``Improving and Expanding
Training Opportunities for F-1 Nonimmigrant Students With STEM
Degrees and Cap-Gap Relief for All Eligible F-1 Students,'' 81 FR
13039 (Mar. 11, 2016). Through this proposed rule, DHS amended the
cap-gap procedures by no longer requiring USCIS to issue a Federal
Register notice indicating that the H-1B cap must first be met (or
would likely be met) for the current fiscal year.
---------------------------------------------------------------------------

IV. Discussion of the Proposed Rule

A. Modernization and Efficiencies

1. Amending the Definition of a ``Specialty Occupation''
DHS proposes to revise the regulatory definition and standards for
a ``specialty occupation'' to better align with the statutory
definition of that term. Section 101(a)(15)(H)(i)(b) of the INA, 8
U.S.C. 1101(a)(15)(H)(i)(b), describes nonimmigrants coming to the
United States temporarily to perform services in a specialty
occupation. Section 214(i)(1) of the INA, 8 U.S.C. 1184(i)(1) states
that the term ``specialty occupation'' means: ``an occupation that
requires--(A) theoretical and practical application of a body of highly
specialized knowledge, and (B) attainment of a bachelor's or higher
degree in the specific specialty (or its equivalent) as a minimum for
entry into the occupation in the United States.''
Currently, 8 CFR 214.2(h)(4)(ii) defines ``specialty occupation''
as an occupation which requires theoretical and practical application
of a body of highly specialized knowledge in fields of human endeavor
including, but not limited to, architecture, engineering, mathematics,
physical sciences, social sciences, medicine and health, education,
business specialties, accounting, law, theology, and the arts, and
which requires the attainment of a bachelor's degree or higher in a
specific specialty, or its equivalent, as a minimum for entry into the
occupation in the United States.
This proposed rule would add language to this definition to codify
existing USCIS practice that there must be a direct relationship
between the required degree field(s) and the duties of the position;
there may be more than one acceptable degree field for a specialty
occupation; and a general degree is insufficient.\18\ Specifically,

[[Page 72875]]

DHS proposes to add language to the definition of ``specialty
occupation'' clarifying that the required specialized studies must be
directly related to the position. DHS also proposes to add language
stating that a position is not a specialty occupation if attainment of
a general degree, such as business administration or liberal arts,
without further specialization, is sufficient to qualify for the
position, and that a position may allow a range of degrees or apply
multiple bodies of highly specialized knowledge, provided that each of
those qualifying degree fields or each body of highly specialized
knowledge is directly related to the position.
---------------------------------------------------------------------------

\18\ See, e.g., Madkudu Inc., et al., v. U.S. Citizenship and
Immigration Services, et al. 5:20-cv-2653-SVK (N.D. Ca. Aug. 20,
2021) Settlement Agreement at 4 (``if the record shows that the
petitioner would consider someone as qualified for the position
based on less than a bachelor's degree in a specialized field
directly related to the position (e.g., an associate's degree, a
bachelor's degree in a generalized field of study without a minor,
major, concentration, or specialization in market research,
marketing, or research methods (see Sections II.C.1.b and c), or a
bachelor's degree in a field of study unrelated to the position),
then the position would not meet the statutory and regulatory
definitions of specialty occupation at 8 U.S.C. 1184(i)(1) and 8 CFR
214.2(h)(4)(ii).''), https://www.uscis.gov/sites/default/files/document/legal-docs/Madkudu-settlement-agreement.pdf (last visited
Sep. 5, 2023).
---------------------------------------------------------------------------

A position for which a bachelor's degree in any field is sufficient
to qualify for the position, or for which a bachelor's degree in a wide
variety of fields unrelated to the position is sufficient to qualify,
would not be considered a specialty occupation as it would not require
the application of a body of highly specialized knowledge.\19\
Similarly, the amended definition clarifies that a position would not
qualify as a specialty occupation if attainment of a general degree,
without further specialization, is sufficient to qualify for the
position.\20\ The burden of proof is on the petitioner to demonstrate
that each qualifying degree field is directly related to the position.
This is consistent with the statutory requirement that a degree be ``in
the specific specialty'' and is USCIS' long-standing practice.
---------------------------------------------------------------------------

\19\ See Caremax Inc v. Holder, 40 F. Supp. 3d 1182, 1187-88
(N.D. Cal. 2014).
\20\ Although a general-purpose bachelor's degree, such as a
degree in business or business administration, may be a legitimate
prerequisite for a particular position, requiring such a degree,
without more, will not justify a conclusion that a particular
position qualifies for classification as a specialty occupation.
See, e.g., Royal Siam Corp., 484 F.3d 139, 147 (1st Cir. 2007)
(``The courts and the agency consistently have stated that, although
a general-purpose bachelor's degree, such as a business
administration degree, may be a legitimate prerequisite for a
particular position, requiring such a degree, without more, will not
justify the granting of a petition for an H-1B specialty occupation
visa.''); Shanti, Inc. v. Reno, 36 F. Supp. 2d 1151, 1162-1164 (D.
Minn. 1999) (the former INS did not depart from established policy
or precedent when concluding that a general degree, such as a
business administration degree, without more, does not constitute a
degree in a specialized field); Raj & Co. v. USCIS, 85 F. Supp. 3d
1241, 1246 (W.D. Wash. 2015) (it is ``well-settled in the case law
and USCIS's reasonable interpretations of the regulatory framework''
that ``a generalized bachelor['s] degree requirement is
[in]sufficient to render a position sufficiently specialized to
qualify for H-1B status.''); Vision Builders, LLC v. USCIS, No. 19-
CV-3159, 2020 WL 5891546, at *6 (D.D.C. Oct. 5, 2020) (citing Raj).
---------------------------------------------------------------------------

Under this proposed addition to 8 CFR 214.2(h)(4)(ii), the
petitioner would continue to have the burden of demonstrating that
there is a direct relationship between the required degree in a
specific specialty (in other words, the degree field(s) that would
qualify someone for the position) and the duties of the position. In
many cases, the relationship will be clear and relatively easy to
establish. For example, it should not be difficult to establish that a
required medical degree is directly related to the duties of a
physician. Similarly, a direct relationship may readily be established
between the duties of a lawyer and a required law degree and the duties
of an architect and a required architecture degree. In other cases, the
direct relationship may be less apparent, and the petitioner may have
to explain and provide documentation to meet its burden of
demonstrating the relationship. As in the past, to establish a direct
relationship, the petitioner would need to provide information
regarding the course(s) of study associated with the required degree,
or its equivalent, and the duties of the proffered position, and
demonstrate the connection between the course of study and the duties
and responsibilities of the position.
The requirement of a direct relationship between a degree in a
specific specialty, or its equivalent, and the position, however,
should not be construed as requiring a singular field of study.\21\ For
example, for the position of electrical engineer, a degree in
electrical engineering or electronics engineering may qualify a person
for the position, and therefore a minimum of a bachelor's or higher
degree, or its equivalent, in more than one field of study may be
recognized as satisfying the ``degree in the specific specialty (or its
equivalent)'' requirement of section 214(i)(1)(B) of the INA, 8 U.S.C.
1184(i)(1)(B). In such a case, the ``body of highly specialized
knowledge'' required by section 214(i)(1)(A) of the INA, 8 U.S.C.
1184(i)(1)(A), would be afforded by either degree, and each field of
study accordingly would be in a ``specific specialty'' directly related
to the position consistent with section 214(i)(1)(B) of the INA, 8
U.S.C. 1184(i)(1)(B).
---------------------------------------------------------------------------

\21\ See, e.g., Relx, Inc. v. Baran, 397 F. Supp. 3d 41, 54
(D.D.C. 2019) (``There is no requirement in the statute that only
one type of degree be accepted for a position to be specialized.'');
Residential Fin. Corp. v. U.S. Citizenship & Immigration Servs., 839
F. Supp. 2d 985, 997 (S.D. Ohio 2012) (stating that when determining
whether a position is a specialty occupation, ``knowledge and not
the title of the degree is what is important'').
---------------------------------------------------------------------------

In cases where the petitioner lists degrees in multiple disparate
fields of study as the minimum entry requirement for a position, the
petitioner has the burden of establishing how each field of study is in
a specific specialty providing ``a body of highly specialized
knowledge'' directly related to the duties and responsibilities of the
particular position. The petitioner must show that its position meets
the requirements of sections 214(i)(1)(A) and (B) of the INA, 8 U.S.C.
1184(i)(1)(A) and (B), and the regulatory definition.\22\
---------------------------------------------------------------------------

\22\ The petitioner must also establish that its position meets
one of the four criteria at proposed 8 CFR 214.2(h)(4)(iii)(A),
which is explained in detail below.
---------------------------------------------------------------------------

As such, under this proposed rule, a minimum entry requirement of a
bachelor's or higher degree, or its equivalent, in multiple disparate
fields of study would not automatically disqualify a position from
being a specialty occupation. For example, a petitioner may be able to
establish that a bachelor's degree in the specific specialties of
either education or chemistry, each of which provide a body of highly
specialized knowledge, is directly related to the duties and
responsibilities of a chemistry teacher. In such a scenario, the ``body
of highly specialized knowledge'' requirement of section 214(i)(1)(A)
of the INA, 8 U.S.C. 1184(i)(1)(A), and the ``degree in the specific
specialty'' requirement of section 214(i)(1)(B) of the INA, 8 U.S.C.
1184(i)(1)(B), would both be met by either degree and the chemistry
teacher position listing multiple disparate fields of study would
qualify as a specialty occupation.
In determining whether a position involves a specialty occupation,
USCIS currently interprets the ``specific specialty'' requirement in
section 214(i)(1)(B) of the INA, 8 U.S.C. 1184(i)(1)(B), to relate back
to the body of highly specialized knowledge requirement referenced in
section 214(i)(1)(A) of the INA, 8 U.S.C. 1184(i)(1)(A), required by
the specialty occupation in question. The ``specific specialty''
requirement is only met if the degree in a specific specialty or
specialties, or its equivalent, provides a body of highly specialized
knowledge directly related to the duties and responsibilities of the
particular position as required by section 214(i)(1)(A) of the INA, 8
U.S.C. 1184(i)(1)(A).
If the minimum entry requirement for a position is a general degree
without further specialization or an explanation of what type of degree
is required, the ``degree in the specific specialty (or its
equivalent)'' requirement of INA section 214(i)(1)(B), 8 U.S.C.
1184(i)(1)(B),

[[Page 72876]]

would not be satisfied. For example, a requirement of a general
business degree for a marketing position would not satisfy the specific
specialty requirement. In this instance, the petitioner would not
satisfactorily demonstrate how a required general business degree
provides a body of highly specialized knowledge that is directly
related to the duties and responsibilities of a marketing position.\23\
---------------------------------------------------------------------------

\23\ See Royal Siam Corp., 484 F.3d at 147.
---------------------------------------------------------------------------

Similarly, a petition with a requirement of any engineering degree
in any field of engineering for a position of software developer would
generally not satisfy the statutory requirement, as it is unlikely the
petitioner could establish how the fields of study within any
engineering degree provide a body of highly specialized knowledge
directly relating to the duties and responsibilities of the software
developer position.\24\ If an individual could qualify for a
petitioner's software developer position based on having a seemingly
unrelated engineering degree, then it cannot be concluded that the
position requires the application of a body of highly specialized
knowledge and a degree in a specific specialty, because someone with an
entirely or largely unrelated degree may qualify to perform the
job.\25\ In such a scenario, the requirements of INA sections
214(i)(1)(A) and (B), 8 U.S.C. 1184(i)(1)(A) and (B), would not be
satisfied.
---------------------------------------------------------------------------

\24\ The requirement of any engineering degree could include,
for example, a chemical engineering degree, marine engineering
degree, mining engineering degree, or any other engineering degree
in a multitude of seemingly unrelated fields.
\25\ These examples refer to the educational credentials by the
title of the degree for expediency. However, USCIS separately
evaluates whether the beneficiary's actual course of study is
directly related to the duties of the position, rather than merely
the title of the degree. When applicable, USCIS also will consider
whether the beneficiary has the education, specialized training,
and/or progressively responsible experience that is equivalent to
completion of a U.S. baccalaureate or higher degree in the specialty
occupation. See 8 CFR 214.2(h)(4)(iii)(C)(4).
---------------------------------------------------------------------------

Further, if a position requires a bachelor's degree in an
unspecified ``quantitative field'' (which could include mathematics,
statistics, economics, accounting, or physics) the petitioner must
identify specific specialties, such as the majors or degree fields,
within the wide variety of ``quantitative fields'' and establish how
each identified degree in a specific specialty provides a body of
highly specialized knowledge, consistent with INA section 214(i)(1)(A),
8 U.S.C. 1184(i)(1)(A), that is directly related to the duties and
responsibilities of the software developer position. While a position
may allow a range of degrees, and apply multiple bodies of highly
specialized knowledge, each of those qualifying degree fields or each
body of highly specialized knowledge must be directly related to the
proffered position.
2. Amending the Criteria for Specialty Occupation Positions
Under INA section 214(i)(1), 8 U.S.C. 1184(i)(1), a ``specialty
occupation'' requires attainment of a bachelor's or higher degree in
the specific specialty (or its equivalent) as a minimum for entry into
the occupation in the United States. The current regulatory criteria at
8 CFR 214.2(h)(4)(iii)(A)(1) states that a bachelor's degree is
``normally'' required. To provide additional guidance to adjudicators,
attorneys, and the public, DHS is proposing to define the term
``normally'' at proposed 8 CFR 214.2(h)(4)(iii)(A)(5) to state that,
for purposes of the criteria in this provision, ``normally'' means
``conforming to a type, standard, or regular pattern'' and is
``characterized by that which is considered usual, typical, common, or
routine.'' \26\ The proposed regulation also clarifies that
``[n]ormally does not mean always.'' For these purposes, there is no
significant difference between the synonyms ``normal,'' ``usual,''
``typical,'' ``common,'' or ``routine.'' \27\ These synonyms illustrate
that a description of an occupation that uses a synonym for the word
``normally'' in describing whether a bachelor's or higher degree is
required for the occupation can support a finding that a degree is
``normally'' required. By the same token, other synonyms for the word
``normally'' that are not listed in proposed 8 CFR
214.2(h)(4)(iii)(A)(5), such as ``mostly'' or ``frequently,'' also can
support a finding that a degree is ``normally'' required. This proposed
change clarifies that the petitioner does not have to establish that
the bachelor's degree in a specific specialty or its equivalent is
always a minimum requirement for entry into the occupation in the
United States. This is consistent with both USCIS's current practice,
as reflected by the statement on the USCIS website that ``normally,''
``common,'' and ``usually'' are not interpreted to mean ``always,''
\28\ and USCIS's rescission of a 2017 policy memorandum guiding
officers on the interpretation of the Occupational Outlook Handbook's
with respect to the computer programmer occupation.\29\ USCIS rescinded
the 2017 policy memorandum following the decision of the U.S. Court of
Appeals for the Ninth Circuit in Innova Solutions v. Baran, 983 F.3d
428 (9th Cir. 2020).\30\ As the court stated in Innova, ``the fact that
some computer programmers are hired without a bachelor's degree is
entirely consistent with a bachelor's degree `normally [being] the
minimum requirement for entry.' '' \31\ USCIS currently applies this
same rationale to other occupations. By proposing to codify USCIS's
current practice at proposed 8 CFR 214.2(h)(4)(iii)(A)(5), DHS seeks to
provide H-1B petitioners with more certainty as to what adjudication
standards apply to their petitions.
---------------------------------------------------------------------------

\26\ See Merriam-Webster Dictionary at https://www.merriam-webster.com/dictionary/normal (last visited Aug. 24, 2023).
\27\ See Innova, 983 F.3d at 432 (``There is no daylight between
typically needed, per the OOH, and normally required, per the
regulatory criteria. `Typically' and `normally' are synonyms.'').
\28\ See USCIS, ``H-1B Specialty Occupations, DOD Cooperative
Research and Development Project Workers, and Fashion Models,''
https://www.uscis.gov/working-in-the-united-states/h-1b-specialty-occupations (last updated Feb. 8, 2023).
\29\ See USCIS, ``Rescission of 2017 Policy Memorandum PM-602-
0142,'' PM-602-0142.1, https://www.uscis.gov/sites/default/files/document/memos/PM-602-0142.1_RescissionOfPM-602-0142.pdf (Feb. 3,
2021).
\30\ The 2017 memorandum instructed officers not to ``generally
consider the position of [computer] programmer to qualify as a
specialty occupation,'' specifically where the proffered position
did not have a minimum entry requirement of a U.S. bachelor's or
higher and indicated that the petitioner must provide other evidence
to establish that the particular position is one in a specialty
occupation. See USCIS, Recission of the December 22, 2000 ``Guidance
memo on H1B computer related positions'', PM-602-0142, https://www.uscis.gov/sites/default/files/document/memos/PM-6002-0142-H-1BComputerRelatedPositionsRecission.pdf (Mar. 31, 2017).
\31\ See Innova, 983 F.3d at 432 (emphasis in original).
---------------------------------------------------------------------------

In addition, DHS proposes to codify its current practices by
revising the criteria for a specialty occupation at current 8 CFR
214.2(h)(4)(iii)(A). First, DHS proposes to replace the phrase ``To
qualify as a specialty occupation, the position must meet one of the
following criteria'' with ``A position does not meet the definition of
specialty occupation in paragraph (h)(4)(ii) of this section unless it
also satisfies at least one of the following criteria at paragraphs
(h)(4)(iii)(A)(1) through (4) of this section.'' This proposed change
would clarify that meeting one of the regulatory criteria is a
necessary part of--but not always sufficient for--demonstrating that a
position qualifies as a specialty occupation. This is not new; the
criteria at current 8 CFR 214.2(h)(4)(iii)(A) must be construed in
harmony with and in addition to other controlling regulatory provisions
and

[[Page 72877]]

with the statute as a whole.\32\ In 2000, the U.S. Court of Appeals for
the Fifth Circuit highlighted the ambiguity of the regulatory
provision's current wording, and petitioners have misinterpreted the
criteria in 8 CFR 214.2(h)(4)(iii)(A) as setting forth both the
necessary and sufficient conditions to qualify as a specialty
occupation, a reading that resulted in some positions meeting one
condition of 8 CFR 214.2(h)(4)(iii)(A), but not the definition as a
whole.\33\ These proposed changes would eliminate this source of
confusion.
---------------------------------------------------------------------------

\32\ Numerous AAO non-precedent decisions spanning several
decades have explained that the criteria at 8 CFR
214.2(h)(4)(iii)(A) must logically be read together with section
214(i)(1) of the Act and 8 CFR 214.2(h)(4)(ii), and that the
regulatory criteria must be construed in harmony with the thrust of
the related provisions and with the statute as a whole. See, e.g.,
In Re. ---, 2009 WL 4982420 (AAO Aug. 21, 2009); In Re. ---, 2009 WL
4982607 (AAO Sept. 3, 2009); In Re. 15542, 2016 WL 929725 (AAO Feb.
22, 2016); In Re. 17442092, 2021 WL 4708199 (AAO Aug. 11, 2021); In
Re. 21900502, 2022 WL 3211254 (AAO July 7, 2022).
\33\ See Defensor v. Meissner, 201 F.3d 384, 387 (5th Cir. 2000)
(stating that current 8 CFR 214.2(h)(4)(iii)(A) ``appears to
implement the statutory and regulatory definition of specialty
occupation through a set of four different standards. However, this
section might also be read as merely an additional requirement that
a position must meet, in addition to the statutory and regulatory
definition. The ambiguity stems from the regulation's use of the
phrase `to qualify as.' In common usage, this phrase suggests that
whatever conditions follow are both necessary and sufficient
conditions. Strictly speaking, however, the language logically
entails only that whatever conditions follow are necessary
conditions. . . . If Sec. 214.2(h)(4)(iii)(A) is read to create a
necessary and sufficient condition for being a specialty occupation,
the regulation appears somewhat at odds with the statutory and
regulatory definitions of `specialty occupation.' '').
---------------------------------------------------------------------------

DHS is also proposing to amend 8 CFR 214.2(h)(4)(iii)(A)(1) by
adding ``U.S.'' to ``baccalaureate,'' and replacing the word
``position'' with ``occupation,'' so that it sets forth ``the minimum
requirement for entry into the particular occupation in which the
beneficiary will be employed.'' See proposed 8 CFR
214.2(h)(4)(iii)(A)(1). Adding ``U.S.'' clarifies that a baccalaureate
degree must be a U.S. degree (or its foreign equivalent), and that a
foreign baccalaureate is not necessarily an equivalent. DHS is
proposing this change to codify longstanding practice and to reflect a
consistent standard that will align the regulation discussing the
position requirement at 8 CFR 214.2(h)(4)(iii)(A)(1) with the statutory
requirement of ``a bachelor's or higher degree in the specific
specialty (or its equivalent) as a minimum for entry into the
occupation in the United States'' at INA section 214(i)(1)(B), 8 U.S.C.
1184(i)(1)(B), as well as the regulatory requirement that an H-1B
beneficiary must have the equivalent of a U.S. baccalaureate degree at
8 CFR 214.2(h)(4)(iii)(C)(1). Replacing ``position'' with
``occupation'' would clarify that the first criterion can be satisfied
if the petitioner can show that its position falls within an
occupational category for which all positions within that category have
a qualifying minimum degree requirement.\34\ This revision would
provide added clarity to the regulatory criteria as the criteria would
flow from general to specific (i.e., occupation level to industry to
employer to position). If the occupation requires at least a bachelor's
degree in a specific specialty (e.g., architect or aeronautical
engineer) then it necessarily follows that a position in one of those
occupations would require a degree and qualify as a specialty
occupation. If the occupation does not require at least a bachelor's
degree in a specific specialty, then the petitioner could submit
evidence to show that at least a bachelor's degree in a specific
specialty (or its equivalent) is required based on U.S. industry norms,
the employer's particular requirement, or because of the particulars of
the specific position. See proposed 8 CFR 214.2(h)(4)(iii)(A)(2)
through (4). USCIS will continue its practice of consulting the U.S.
Department of Labor's (DOL's) Occupational Outlook Handbook and other
reliable and informative sources submitted by the petitioner, to assist
in its determination regarding the minimum entry requirements for
positions located within a given occupation.
---------------------------------------------------------------------------

\34\ DHS generally determines a position's occupation or
occupational category by looking at the standard occupational
classification (SOC) code designated on the LCA.
---------------------------------------------------------------------------

DHS further proposes to amend 8 CFR 214.2(h)(4)(iii)(A)(2) by
consolidating this criterion's second prong into the fourth criterion.
See proposed 8 CFR 214.2(h)(4)(iii)(A)(2). The second prong of current
8 CFR 214.2(h)(4)(iii)(A)(2), which focuses on a position's complexity
or uniqueness, is similar to current 8 CFR 214.2(h)(4)(iii)(A)(4),
which focuses on a position's complexity and specialization. In
practice, they are frequently consolidated into the same analysis. This
amendment would streamline both criteria, as well as the explanation
and analysis in written decisions issued by USCIS pertaining to
specialty occupation determinations, as such decisions discuss all four
criteria and are necessarily repetitive because of the existing overlap
between 8 CFR 214.2(h)(4)(iii)(A)(2) and (4). This amendment would also
simplify the analysis because petitioners may demonstrate eligibility
under this criterion if the position is ``so specialized, complex, or
unique'', as opposed to ``so complex or unique'' under current 8 CFR
214.2(h)(4)(iii)(A)(2) and ``so specialized and complex'' under current
8 CFR 214.2(h)(4)(iii)(A)(4) (emphasis added). Notwithstanding these
amendments, the analytical framework of the first prong of proposed 8
CFR 214.2(h)(4)(iii)(A)(2) generally would remain the same. Thus, a
petitioner would satisfy proposed 8 CFR 214.2(h)(4)(iii)(A)(2) if it
demonstrates that the specialty degree requirement is normally the
minimum entry requirement for: (1) parallel positions; (2) at similar
organizations; (3) within the employer's industry in the United States.
This criterion is intended for the subset of positions with minimum
entry requirements that are determined not necessarily by occupation,
but by specific industry standards. For this criterion, DHS would
continue its practice of consulting DOL's Occupational Outlook Handbook
and other reliable and informative sources, such as information from
the industry's professional association or licensing body, submitted by
the petitioner.
USCIS proposes to change the third criterion at proposed 8 CFR
214.2(h)(4)(iii)(A)(3), in part, from stating that the employer
normally requires a ``degree or its equivalent for the position'' to
stating that the employer normally requires a ``U.S. baccalaureate or
higher degree in a directly related specific specialty, or its
equivalent, for the position.'' The additional phrase about a ``degree
in a directly related specific specialty'' would reinforce the existing
requirements for a specialty occupation, in other words, that the
position itself must require a directly related specialty degree, or
its equivalent, to perform its duties. See also proposed 8 CFR
214.2(h)(4)(iii)(A)(3). Employers requiring degrees as a proxy for a
generic set of skills would not meet this standard. Employers listing a
specialized degree as a hiring preference would not meet this standard
either. If USCIS were constrained to recognize a position as a
specialty occupation merely because an employer has an established
practice of demanding certain educational requirements for the offered
position--without consideration of whether the position actually
requires the application of a body of highly specialized knowledge
consistent with the degree requirement--then any beneficiary with a
bachelor's degree in a specific specialty could be brought

[[Page 72878]]

into the United States to perform work in a non-specialty occupation if
the employer arbitrarily imposed such a degree requirement for the non-
specialty occupation position.\35\ With respect to an employer's normal
employment practices, a petitioner could submit evidence of an
established recruiting and hiring practice to establish its
requirements for the position. Keeping the word ``normally'' in this
criterion is intended to preserve flexibility for petitioners, although
petitioners seeking to fill a position for the first time generally
would not be able to demonstrate an established practice.\36\
---------------------------------------------------------------------------

\35\ See Defensor, 201 F.3d at 388 (noting ``If only [the
employer]'s requirements could be considered, then any alien with a
bachelor's degree could be brought into the United States to perform
a non-specialty occupation, so long as that person's employment was
arranged through an employment agency which required all clients to
have bachelor's degrees. Thus, aliens could obtain six year visas
for any occupation, no matter how unskilled, through the subterfuge
of an employment agency. This result is completely opposite the
plain purpose of the statute and regulations, which is to limit H1-B
[sic] visas to positions which require specialized experience and
education to perform.'').
\36\ First-time hirings are not precluded from qualifying under
one of the other criteria.
---------------------------------------------------------------------------

Furthermore, DHS proposes to add ``or third party if the
beneficiary will be staffed to that third party'' to proposed 8 CFR
214.2(h)(4)(iii)(A)(3) \37\ to clarify that it is the third party's
requirements, not the petitioning employer's, that are most relevant if
the beneficiary would be staffed to a third party. This change would be
consistent with proposed 8 CFR 214.2(h)(4)(i)(B)(3), which clarifies
that when a beneficiary is staffed to a third party, it is the
requirements of that third party, and not the petitioner, that are most
relevant when determining whether the position is a specialty
occupation. This proposed revision would define ``staffed'' in the same
way to mean that the beneficiary would be contracted to fill a position
in the third party's organization. The criterion at proposed 8 CFR
214.2(h)(4)(iii)(A)(4) incorporates the second prong of current 8 CFR
214.2(h)(4)(iii)(A)(2). See proposed 8 CFR 214.2(h)(4)(iii)(A)(4). DHS
proposes no other substantive changes to this criterion. Thus, the
fourth criterion could be satisfied if the petitioner demonstrates that
the proffered position's job duties are so specialized, complex, or
unique that they necessitate the attainment of a U.S. bachelor's degree
in a directly related specific specialty, or its equivalent.
---------------------------------------------------------------------------

\37\ The full proposed regulation would read: ``The employer, or
third party if the beneficiary will be staffed to that third party,
normally requires a U.S. baccalaureate or higher degree in a
directly related specific specialty, or its equivalent, for the
position.''
---------------------------------------------------------------------------

3. Amended Petitions
DHS proposes to clarify when an amended or new H-1B petition must
be filed due to a change in an H-1B worker's place of employment.
Specifically, this rule proposes to clarify that any change of work
location that requires a new LCA is itself considered a material change
and therefore requires the petitioning employer to file an amended or
new petition with USCIS before the H-1B worker may perform work under
the changed conditions. Further, DHS proposes to consolidate and
clarify guidance on when an amended or new petition is required for
short-term placement of H-1B workers at a worksite not listed on the
approved petition or corresponding LCA.\38\ These proposed changes are
not intended to depart from existing regulations and guidance, but
rather, seek to consolidate existing requirements and make clear when a
petitioner must submit an amended or new petition. DHS regulations
already require that petitioning employers file an amended or new H-1B
petition for all situations involving a material change to the
conditions of H-1B employment. Specifically, 8 CFR 214.2(h)(2)(i)(E)
states that a ``petitioner shall file an amended or new petition, with
fee, with the Service Center where the original petition was filed to
reflect any material changes in the terms and conditions of employment
or training or the alien's eligibility as specified in the original
approved petition.'' That regulation goes on to add that if the amended
or new petition is an H-1B petition, a new LCA must accompany the
petition. Additionally, 8 CFR 214.2(h)(11)(i)(A) requires a petitioner
to ``immediately notify'' USCIS of a change in the terms and conditions
of employment of a beneficiary which may affect eligibility for H-1B
status. However, USCIS seeks to clarify when an amended or new petition
must be filed or when a petitioner need not file an amended petition.
To find relevant requirements, H-1B petitioners and USCIS officers
currently must look to various sources, including USCIS policy
guidance, DOL regulations, and DOL guidance. DHS seeks to make its
regulations relating to amended or new H-1B petitions more
comprehensive and useful by incorporating relevant requirements into
proposed 8 CFR 214.2(h)(2)(i)(E)(2).
---------------------------------------------------------------------------

\38\ See USCIS, ``USCIS Final Guidance on When to File an
Amended or New H-1B Petition After Matter of Simeio Solutions,
LLC,'' PM-602-0120 (July 21, 2015), https://www.uscis.gov/sites/default/files/document/memos/2015-0721_Simeio_Solutions_Transition_Guidance_Memo_Format_7_21_15.pdf.
---------------------------------------------------------------------------

Under 8 CFR 214.2(h)(4)(i)(B), an H-1B petition for a specialty
occupation worker must include a certified LCA from DOL. DOL regulation
at 20 CFR 655.731 provides details on the LCA requirements, including
that an employer seeking to employ an H-1B worker in a specialty
occupation must attest on the LCA that it will pay the H-1B worker the
required wage rate. The required wage rate is the higher of either the
prevailing wage \39\ for the occupational classification, or the actual
wage paid by the employer to similarly situated employees, in the
geographic area of intended employment.\40\ The LCA seeks to protect
U.S. workers and their wages by disincentivizing hiring foreign workers
at lower wages. A key component to filing an LCA is determining the
appropriate wage to list on the application. Generally, a petitioning
employer is not required to use any specific methodology to determine
the prevailing wage and may utilize a wage obtained from the Office of
Foreign Labor Certification, an independent authoritative source, or
other legitimate sources of wage data.\41\ While there are many factors
that may be considered when determining the prevailing wage, one of the
most significant is the geographic area where the H-1B worker will
perform their duties. Because prevailing wages differ, often
significantly, from location to location, a change in geographic area
of intended employment that goes beyond the current metropolitan
statistical area

[[Page 72879]]

(MSA) often will have an impact on the prevailing wage, requiring a new
LCA.
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\39\ 20 CFR 655.731(a)(2)(ii) states that, if the job
opportunity is not covered by a collective bargaining agreement, the
prevailing wage shall be the arithmetic mean of the wages of workers
similarly employed, except that the prevailing wage shall be the
median when provided by paragraphs (a)(2)(ii)(A), (b)(3)(iii)(B)(2),
and (b)(3)(iii)(C)(2) of 20 CFR 655.731. An employer is not
permitted to pay a wage that is lower than a wage required under any
other applicable Federal, State or local law.
\40\ Pursuant to 20 CFR 655.715, ``Area of intended employment''
means the area within normal commuting distance of the place
(address) of employment where the H-1B nonimmigrant is or will be
employed. There is no rigid measure of distance which constitutes a
normal commuting distance or normal commuting area, because there
may be widely varying factual circumstances among different areas
(e.g., normal commuting distances might be 20, 30, or 50 miles). If
the place of employment is within a Metropolitan Statistical Area
(MSA) or a Primary Metropolitan Statistical Area (PMSA), any place
within the MSA or PMSA is deemed to be within normal commuting
distance of the place of employment; however, all locations within a
Consolidated Metropolitan Statistical Area (CMSA) will not
automatically be deemed to be within normal commuting distance. The
borders of MSAs and PMSAs are not controlling with regard to the
identification of the normal commuting area; a location outside of
an MSA or PMSA (or a CMSA) may be within normal commuting distance
of a location that is inside (e.g., near the border of) the MSA or
PMSA (or CMSA).
\41\ See 20 CFR 655.731(a)(2).
---------------------------------------------------------------------------

In its precedent decision Matter of Simeio Solutions, LLC, 26 I&N
Dec. 542 (AAO 2015), USCIS's Administrative Appeals Office (AAO) held
that a change in geographic area of employment that would require a new
LCA is considered a material change for purposes of 8 CFR
214.2(h)(2)(i)(E) and (h)(11)(i)(A) because the new LCA may impact
eligibility under 8 CFR 214.2(h)(4)(i)(B)(1). For example, a change in
location may impact eligibility if the new location is in an MSA with a
higher wage. USCIS provided additional guidance implementing Matter of
Simeio Solutions in July 2015 in its policy memorandum ``USCIS Final
Guidance on When to File an Amended or New H-1B Petition After Matter
of Simeio Solutions, LLC.'' \42\
---------------------------------------------------------------------------

\42\ See USCIS, ``USCIS Final Guidance on When to File an
Amended or New H-1B Petition After Matter of Simeio Solutions,
LLC,'' PM-602-0120 (July 21, 2015), https://www.uscis.gov/sites/default/files/document/memos/2015-0721_Simeio_Solutions_Transition_Guidance_Memo_Format_7_21_15.pdf.
---------------------------------------------------------------------------

In proposed 8 CFR 214.2(h)(2)(i)(E)(2), DHS proposes to specify
that ``Any change in the place of employment to a geographical area
that requires a corresponding labor condition application to be
certified to USCIS is considered a material change and requires an
amended or new petition to be filed with USCIS before the H-1B worker
may begin work at the new place of employment.'' Further, DHS proposes
to specify in proposed 8 CFR 214.2(h)(2)(i)(E)(2) that ``[t]he amended
or new petition must be properly filed before the material change(s)
takes place''. This would codify current USCIS practice as articulated
in its policy memorandum ``USCIS Final Guidance on When to File an
Amended or New H-1B Petition After Matter of Simeio Solutions, LLC,''
which discusses the ``USCIS position that H-1B petitioners are required
to file an amended or new petition before placing an H-1B employee at a
new place of employment not covered by an existing, approved H-1B
petition.'' As with current USCIS practice, proposed 8 CFR
214.2(h)(2)(i)(E)(2) would allow the worker to begin working under the
materially changed terms and conditions of employment upon the filing
of the amended or new petition, assuming all other requirements and
terms of eligibility are met. They would not need to wait for a final
decision on the amended or new petition in order to begin working if
eligible in accordance with existing portability provisions at 8 CFR
214.2(h)(2)(i)(H). If while the amended or new petition is pending
adjudication another material change occurs, an employer must file
another amended or new petition to account for the new changes.\43\ If
that amended or new petition is denied, the H-1B worker generally may
return to the position and worksite listed on the most recently
approved petition as long as that petition and corresponding LCA are
still valid.\44\
---------------------------------------------------------------------------

\43\ See id. at 7.
\44\ See id.
---------------------------------------------------------------------------

Proposed 8 CFR 214.2(h)(2)(i)(E)(2) would also set forth limited
circumstances in which a change to the beneficiary's place of
employment would not require the petitioner to file an amended
petition. Proposed 8 CFR 214.2(h)(2)(i)(E)(2)(i) states that moving a
beneficiary to a new job location within the same area of intended
employment as listed on the LCA would not require an amended petition,
assuming there are no other material changes. This would be consistent
with INA section 212(n)(4), which provides that a change in the
worksite location within the same MSA of the existing LCA would
generally be deemed to be within the area of employment.\45\ Note that
proposed 8 CFR 214.2(h)(2)(i)(E)(2)(i) does not purport to set forth
all relevant DOL requirements, such as the requirement that the
petitioning employer post notice of the LCA, either electronically or
in hard-copy, in the new work location on or before the date that the
H-1B worker performs any work at the new location.\46\
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\45\ See also 20 CFR 655.734; DOL, Wage and Hour Division,
``Fact Sheet #62J: What does `place of employment' mean?'' (July
2008), https://www.dol.gov/agencies/whd/fact-sheets/62j-h1b-worksite
(``The employer need not obtain a new LCA for another worksite
within the geographic area of intended employment where the employer
already has an existing LCA for that area.'').
\46\ See 20 CFR 655.734(a)(2).
---------------------------------------------------------------------------

Additionally, proposed 8 CFR 214.2(h)(2)(i)(E)(2)(ii) would set
forth the specific durations for short-term placements that would not
require an amended or new petition, assuming there are no other
material changes. This would be consistent with DOL regulations at 20
CFR 655.735 in which short-term placements of less than 30 days, or in
some cases 60 days, do not require a new LCA or an amended or new
petition, provided there are no material changes.
Proposed 8 CFR 214.2(h)(2)(i)(E)(2)(iii) would clarify that an
amended or new petition would not be required when a beneficiary is
going to a non-worksite location to participate in employee
development, will be spending little time at any one location, or will
perform a peripatetic job. Proposed 8 CFR 214.2(h)(2)(i)(E)(2)(iii)
provides examples of ``peripatetic jobs'' including situations where
the job is primarily at one location, but the beneficiary occasionally
travels for short periods to other locations on a casual, short-term
basis, which can be recurring but not excessive (i.e., not exceeding 5
consecutive workdays for any one visit by a peripatetic worker, or 10
consecutive workdays for any one visit by a worker who spends most work
time at one location and travels occasionally to other locations).
Proposed 8 CFR 214.2(h)(2)(i)(E)(2)(iii) would be consistent with DOL
regulations at 20 CFR 655.715, which sets forth several criteria for
what would not constitute a ``place of employment'' or ``worksite,'' as
well as what would constitute an ``employee developmental activity,''
for purposes of requiring a new LCA.
Note that proposed 8 CFR 214.2(h)(2)(i)(E)(2) would not codify all
relevant considerations related to when to file an amended petition.
Stakeholders should still consult DOL regulations and policy guidance
when considering if an amended petition is necessary. Nevertheless, DHS
believes its proposed changes to 8 CFR 214.2(h)(2)(i)(E)(2) would still
be beneficial by providing additional clarity about when a change in an
H-1B worker's place of employment constitutes a material change
requiring an amended or new petition.
DHS proposes to revise and redesignate current 8 CFR
214.2(h)(2)(i)(E) as proposed 8 CFR 214.2(h)(2)(i)(E)(1) so that this
provision would be applicable to all H classifications, while proposed
8 CFR 214.2(h)(2)(i)(E)(2) would be specific to H-1B nonimmigrants. In
proposed 8 CFR 214.2(h)(2)(i)(E)(1), DHS proposes minor changes to
clarify that an amended or new H-1B petition requires a current or new
certified labor condition application.

[[Page 72880]]

4. Deference
DHS seeks to codify and clarify its existing deference policy at
proposed 8 CFR 214.1(c)(5). Deference helps promote consistency and
efficiency for both USCIS and its stakeholders. The deference policy
instructs officers to consider prior determinations involving the same
parties and facts, when there is no material error with the prior
determination, no material change in circumstances or in eligibility,
and no new material information adversely impacting the petitioner's,
applicant's, or beneficiary's eligibility. Through this proposed
regulation, DHS seeks to clarify when petitioners may expect
adjudicators to exercise deference in reviewing their petitions, so
petitioners will be more likely to submit necessary, relevant
supporting evidence. This creates predictability for petitioners and
beneficiaries and leads to fairer and more reliable outcomes. Codifying
and clarifying when USCIS gives deference would also better ensure
consistent adjudications.
In 2004, USCIS issued a memorandum discussing the significance of
prior USCIS adjudications.\47\ The memorandum acknowledged that USCIS
is not bound to approve subsequent petitions or applications where
eligibility has not been demonstrated merely because of a prior
approval, which may have been erroneous. Nevertheless, where there has
been no material change in the underlying facts, the memorandum
specified that adjudicators should defer to a prior determination
involving the same parties and underlying facts unless there was a
material error, a substantial change in circumstances, or new material
information that adversely impacts eligibility. On October 23, 2017,
USCIS rescinded that guidance, expressing concern that the 2004
memorandum shifted the burden from a petitioner to USCIS.\48\ Rather
than attempt to address any perceived concerns, the 2017 memorandum
rescinded the 2004 policy entirely. On April 27, 2021, USCIS
incorporated its deference policy into the USCIS Policy Manual,
acknowledging that adjudicators are not required to approve subsequent
petitions or applications where eligibility has not been demonstrated
strictly because of a prior approval (which may have been erroneous),
but stressing that they should defer to prior determinations involving
the same parties and underlying facts.\49\ As stated in the USCIS
Policy Manual, deviation from a previous approval carries important
consequences and implicates predictability and consistency
concerns.\50\
---------------------------------------------------------------------------

\47\ See USCIS, ``The Significance of a Prior CIS Approval of a
Nonimmigrant Petition in the Context of a Subsequent Determination
Regarding Eligibility for Extension of Petition Validity,'' HQPRD
72/11.3 (Apr. 23, 2004).
\48\ See USCIS, ``Rescission of Guidance Regarding Deference to
Prior Determinations of Eligibility in the Adjudication of Petitions
for Extension of Nonimmigrant Status,'' PM-602-0151 (Oct. 23, 2017).
\49\ See USCIS, ``Deference to Prior Determinations of
Eligibility in Requests for Extensions of Petition Validity, Policy
Alert,'' PA-2021-05 (April 27, 2021), https://www.uscis.gov/sites/default/files/document/policy-manual-updates/20210427-Deference.pdf
(last visited on Mar. 23, 2023).
\50\ See USCIS Policy Manual, Volume 2, ``Nonimmigrants,'' Part
A, ``Nonimmigrant Policies and Procedures'', Chapter 4, ``Extension
of Stay, Change of Status, and Extension of Petition Validity,''
Section B, ``Extension of Petition Validity,'' https://www.uscis.gov/policy-manual/volume-2-part-a-chapter-4.
---------------------------------------------------------------------------

Consistent with current guidance in the USCIS Policy Manual,
proposed 8 CFR 214.1(c)(5) would provide that when adjudicating a
request filed on Form I-129 involving the same parties and the same
underlying facts, USCIS gives deference to its prior determination of
the petitioner's, applicant's, or beneficiary's eligibility. However,
USCIS need not give deference to a prior approval if: there was a
material error involved with a prior approval; there has been a
material change in circumstances or eligibility requirements; or there
is new, material information that adversely impacts the petitioner's,
applicant's, or beneficiary's eligibility.
Proposed 8 CFR 214.1(c)(5) would apply to all nonimmigrants using
Form I-129, Petition for a Nonimmigrant Worker, and would include a
request on Form I-129 involving the same parties and same material
facts. Currently, the USCIS Policy Manual frames its deference policy
as applying to requests for an ``extension of petition validity.'' \51\
The phrase ``extension of petition validity'' may be misread as
limiting USCIS's deference policy to petition extensions and excluding
other types of requests that could involve the same parties and same
material facts. Thus, DHS proposes to more broadly frame proposed 8 CFR
214.1(c)(5) as applying to ``a request filed on Form I-129'' and would
not use the term ``extension of petition validity'' as found in the
current USCIS Policy Manual.
---------------------------------------------------------------------------

\51\ See id.
---------------------------------------------------------------------------

5. Evidence of Maintenance of Status
DHS seeks to clarify current requirements and codify current
practices concerning evidence of maintenance of status at proposed 8
CFR 214.1(c)(1) through (7). Maintenance of status in this context
generally refers to the applicant or beneficiary abiding by the terms
and conditions of admission or extension of stay, as applicable (for
example, if admitted as an H-1B nonimmigrant, the individual worked
according to the terms and conditions of the H-1B petition approval on
which their status was granted and did not engage in activities that
would constitute a violation of status, such as by working without
authorization). Primarily, DHS seeks to clarify that evidence of
maintenance of status is required for petitions where there is a
request to extend or amend the beneficiary's stay. These changes would
impact the population of nonimmigrants named in 8 CFR 214.1(c)(1): E-1,
E-2, E-3, H-1B, H-1B1, H-2A, H-2B, H-3, L-1, O-1, O-2, P-1, P-2, P-3,
Q-1, R-1, and TN nonimmigrants.
First, DHS would add a new provision at proposed 8 CFR 214.1(c)(6),
which would provide, in part, that an applicant or petitioner seeking
an extension of stay must submit supporting evidence to establish that
the applicant or beneficiary maintained the previously accorded
nonimmigrant status before the extension request was filed.\52\
Proposed 8 CFR 214.1(c)(6) would further provide that evidence of such
maintenance of status may include, but is not limited to: copies of
paystubs, W-2 forms, quarterly wage reports, tax returns, contracts,
and work orders. This is consistent with the nonimmigrant petition form
instructions, which state that for all classifications, if a
beneficiary is seeking a change of status (COS) or extension of stay,
evidence of maintenance of status must be included with the new
petition.\53\ The form instructions further state that if the
beneficiary is employed in the United States, the petitioner may submit
copies of the beneficiary's last two pay stubs, Form W-2, and other
relevant evidence, as well as a copy of the beneficiary's Form I-94,
passport, travel document, or Form I-797.\54\ By proposing to codify
these instructions, DHS hopes to clarify that petitioners should
demonstrate such eligibility by submitting supporting documentation
upfront with the extension of stay request, rather than waiting for
USCIS to issue a request for additional

[[Page 72881]]

information such as a request for evidence (RFE) or notice of intent to
deny (NOID). Under proposed 8 CFR 214.1(c)(6) DHS further proposes to
include additional examples of evidence to demonstrate maintenance of
status, which include, but are not limited to: quarterly wage reports,
tax returns, contracts, and work orders. By clearly stating what types
of supporting documentation will help USCIS in adjudicating extension
petitions, DHS hopes to further reduce the need for RFEs and NOIDs,
which can be burdensome to both USCIS and petitioners.
---------------------------------------------------------------------------

\52\ This is subject to the exception in 8 CFR 214.1(c)(4).
\53\ See USCIS, Form I-129 Instructions, ``Instructions for
Petition for Nonimmigrant Worker,'' at 6, https://www.uscis.gov/sites/default/files/document/forms/i-129instr.pdf (last visited Aug.
23, 2023).
\54\ See id.
---------------------------------------------------------------------------

Requiring petitioners (or applicants, in the case of E
nonimmigrants) to submit supporting evidence to establish that the
beneficiary (or applicant) maintained the previously accorded
nonimmigrant status before the extension of stay request was filed
would not conflict with USCIS's current and proposed deference policy.
Although USCIS defers to prior USCIS determinations of eligibility in
extension requests, USCIS would not be able to defer to a prior
determination of maintenance of status during the preceding stay
because it would not have made such a determination until adjudicating
the extension of stay request. Even if there was a prior determination,
USCIS need not give deference when there was a material error involved
with a prior approval; a material change in circumstances or
eligibility requirements; or new, material information that adversely
impacts the petitioner's, applicant's, or beneficiary's eligibility.
Without supporting evidence to demonstrate maintenance of status, it is
unclear how USCIS would determine if there was a material error,
material change, or other new material information. For example,
evidence pertaining to the beneficiary's continued employment (e.g.,
paystubs) may help USCIS to determine whether the beneficiary was being
employed consistent with the prior petition approval or whether there
might have been material changes in the beneficiary's employment (e.g.,
a material change in the place of employment).
Thus, proposed 8 CFR 214.1(c)(6) would make clear that it is the
filers' burden to demonstrate that status was maintained before the
extension of stay request was filed. This would be consistent with
current 8 CFR 214.1(c)(4), which states that, ``An extension of stay
may not be approved for an applicant who failed to maintain the
previously accorded status . . ., '' as well as proposed 8 CFR
214.1(c)(4)(i), which would state that, ``An extension or amendment of
stay may not be approved for an applicant or beneficiary who failed to
maintain the previously accorded status . . .''
In line with proposed 8 CFR 214.1(c)(6), DHS is proposing to amend
8 CFR 214.2(h)(14) by removing the sentence ``Supporting evidence is
not required unless requested by the director.'' This sentence causes
confusion because it implies that supporting evidence is not required,
contrary to current 8 CFR 214.1(c)(1) (a request for an extension of
stay must be filed ``on the form designated by USCIS, . . . with the
initial evidence specified in Sec. 214.2, and in accordance with the
form instructions'') and the form instructions (``[f]or all
classifications, if a beneficiary is seeking a [COS] or extension of
stay, evidence of maintenance of status must be included with the new
petition'').\55\ Removing this sentence from proposed 8 CFR
214.2(h)(14) should further reduce the need for RFEs or NOIDs.
---------------------------------------------------------------------------

\55\ See USCIS, Form I-129 Instructions, ``Instructions for
Petition for Nonimmigrant Worker,'' at 6, https://www.uscis.gov/sites/default/files/document/forms/i-129instr.pdf (last visited Aug.
23, 2023).
---------------------------------------------------------------------------

For the same reasons, DHS is also proposing to remove the same or
similar sentence found in the regulations for the L, O, and P
nonimmigrant classifications. Specifically, DHS proposes to amend 8 CFR
214.2(l)(14)(i) by removing the sentence ``Except in those petitions
involving new offices, supporting documentation is not required, unless
requested by the director.'' DHS proposes to amend 8 CFR 214.2(o)(11)
and (p)(13) by removing the sentence ``Supporting documents are not
required unless requested by the Director.'' DHS is proposing technical
changes to add the word ``generally'' to 8 CFR 214.2(l)(14)(i),
(o)(11), and (p)(13), to account for untimely filed extensions that are
excused consistent with 8 CFR 214.1(c)(4). As stated above, removing
this sentence should reduce the need for RFEs or NOIDs. Further, it
would not add an additional burden on the petitioner or applicant.
In addition, DHS proposes to codify its longstanding practice of
requiring evidence of maintenance of status for petitions requesting to
amend a beneficiary's stay in the United States. The proposed rule
would add language to clarify that the petitioner must submit initial
evidence that the beneficiary maintained the previously accorded status
before the amendment of stay petition was filed. Failure to establish
maintenance of status would result in a denial of the request to amend
the beneficiary's stay in the United States, unless USCIS determines
that the failure to timely file the amendment of stay was due to
extraordinary circumstances. See proposed 8 CFR 214.1(c)(1), (4), (6),
and (7). DHS would also update the Form I-129, Petition for a
Nonimmigrant Worker, as well as the form filing instructions to
coincide with and support these changes, as well as provide clarity
about when an amended petition is appropriate, including the
requirement of establishing maintenance of status for amendment of stay
requests.
Current 8 CFR 214.1(c)(1) generally requires evidence of
maintenance of status with an extension of stay request, and 8 CFR
214.1(c)(4) generally states that an extension of stay may not be
approved where a beneficiary failed to maintain the previously accorded
status. DHS proposes to add specific references to requests to ``amend
the terms and conditions of the nonimmigrant's stay without a request
for additional time'' or for an ``amendment of stay'' to proposed 8 CFR
214.1(c)(1), (4), (6), and (7), so that these regulations clearly
convey that evidence of maintenance of status is also required for
petitions requesting to amend a beneficiary's stay in the United
States, even when the petition is not requesting additional time beyond
the period previously granted. For example, a petitioner may request to
amend the stay of the beneficiary when filing an amended petition but
not seek additional time for the beneficiary's stay because the
beneficiary may have an unexpired I-94 that has been granted until the
end of the 6-year period of admission and is not yet eligible for an
exemption from the 6-year period of admission limitation. In that
example, the petitioner may seek authorization for the beneficiary to
remain in the United States, but under different terms and conditions
than previously granted, without requesting additional time. A
petitioner filing an amended petition with a request to amend the terms
and conditions of the beneficiary's stay, but without a request for
additional time, would not specifically request an ``extension of
stay'' on the Form I-129 petition. Nevertheless, DHS considers a
petition requesting to amend the terms and conditions of the
beneficiary's stay to be substantively equivalent to an extension of
stay request for purposes of establishing maintenance of status and
will exercise discretion when granting such requests. In other words,
DHS considers an amendment of stay request as a request to continue to
allow the beneficiary to remain in the United States based upon the
amended

[[Page 72882]]

conditions for a period of stay that has already been granted.
Therefore, DHS believes that it is reasonable to require evidence that
maintenance of status has been satisfied, before USCIS may favorably
exercise its discretion to grant an amendment of stay request. Further,
including amendments of stay under 8 CFR 214.1(c) would close a
potential loophole of using an amended petition for a beneficiary who
has not maintained status, yet wishes to remain in the United States,
without having to depart and be readmitted in that status.
Currently, most petitioners filing to amend a beneficiary's stay
already submit evidence of maintenance of status; however, if an
amended petition does not contain evidence of maintenance of status,
USCIS typically issues a request for such evidence. By proposing to
codify current practice in 8 CFR 214.1(c), DHS hopes to clarify that
petitioners should demonstrate eligibility by submitting evidence of
maintenance of status with the amendment of stay request (just like
with an extension of stay request), rather than waiting for USCIS to
request this information. By clearly stating what types of supporting
documentation will help USCIS in adjudicating requests to amend a
beneficiary's stay, DHS hopes to further reduce the need for RFEs and
NOIDs, which can be burdensome for petitioners and USCIS, and generally
extends the time needed to complete the adjudication of the petition.
Specifically, DHS proposes to revise 8 CFR 214.1(c)(4), to add a
reference to an ``amendment'' of stay. Aside from clarifying that
evidence of maintenance of status would be required in an amendment of
stay request, this change would also clarify that USCIS can excuse the
late filing of an amendment of stay request under the circumstances
described at proposed 8 CFR 214.1(c)(4)(i)(A) through (D). ``Late
filing'' in this context would include certain extension of stay
requests filed after the expiration date on the Form I-94. A ``late
filing'' would also encompass, for example, a request for an amendment
of stay that was filed after the beneficiary temporarily stopped
working due to extraordinary circumstances beyond their control. DHS
would clarify in proposed 8 CFR 214.1(c)(4)(ii) that, if USCIS excuses
the late filing of an amendment of stay request, it would do so without
requiring the filing of a separate application or petition and would
grant the amendment of stay, if otherwise eligible, from the date the
petition was filed.\56\
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\56\ Proposed 8 CFR 214.1(c)(4)(ii) would continue to state,
with minor revisions, that if USCIS excuses the late filing of an
extension of stay request, it will do so without requiring the
filing of a separate application or petition and will grant the
extension of stay from the date the previously authorized stay
expired or the amendment of stay from the date the petition was
filed.
---------------------------------------------------------------------------

DHS proposes nonsubstantive edits to improve readability to 8 CFR
214.1(c)(4). DHS also proposes nonsubstantive edits in proposed 8 CFR
214.1(c)(1) and (4) to add references to a ``beneficiary,''
``petition,'' or ``Form I-129,'' to account for the extension or
amendment of stay being requested on the Form I-129 petition, and to
replace ``alien'' with ``beneficiary'' and ``Service'' with ``USCIS.''
With respect to proposed 8 CFR 214.1(c)(7), this provision would
contain the same language as current 8 CFR 214.1(c)(5), except that DHS
would add references to an ``amendment'' of stay and make other
nonsubstantive edits similar to the ones described above.
6. Eliminating the Itinerary Requirement for H Programs
DHS is proposing to eliminate the H programs' itinerary
requirement. See proposed 8 CFR 214.2(h)(2)(i)(B) and (F). Current 8
CFR 214.2(h)(2)(i)(B) states that ``A petition that requires services
to be performed or training to be received in more than one location
must include an itinerary with the dates and locations of the services
or training and must be filed with USCIS as provided in the form
instructions.'' In addition, current 8 CFR 214.2(h)(2)(i)(F), for
agents as petitioners, contains itinerary requirement language.
The information provided in an itinerary is largely duplicative of
information already provided in the LCA for H-1B petitions and the
temporary labor certification (TLC) for H-2 petitions. The LCA and TLC
require the petitioner to the list the name and address where work will
be performed, as well as the name and address of any secondary entity
where work will be performed. It is also largely duplicative of
information already provided on the Form I-129, which requires the
petitioner to provide the address where the beneficiary will work if
different from the petitioner's address listed on the form.\57\
Therefore, eliminating the itinerary requirement would reduce
duplication that increases petitioner burden and promote more efficient
adjudications, without compromising program integrity. Furthermore,
USCIS no longer applies the itinerary requirement to H-1B petitions
governed by 8 CFR 214.2(h)(2)(i)(B), as memorialized in USCIS Policy
Memorandum PM-602-0114, ``Rescission of Policy Memoranda'' (June 17,
2020) (rescinding USCIS Policy Memorandum PM-602-0157, ``Contracts and
Itineraries Requirements for H-1B Petitions Involving Third-Party
Worksites'' (Feb. 22, 2018)).\58\
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\57\ See USCIS, Form I-129, ``Petition for a Nonimmigrant
Worker,'' https://www.uscis.gov/sites/default/files/document/forms/i-129.pdf (last visited Mar. 14, 2023).
\58\ USCIS issued policy memorandum PM-602-0114 following the
decision of the U.S. District Court for the District of Columbia in
ITServe Alliance, Inc. v. Cissna, 443 F. Supp. 3d 14, 42 (D.D.C.
2020) (``the itinerary requirement in the INS 1991 Regulation
[codified at 8 CFR 214.2(h)(2)(i)(B)] . . has been superseded by
statute and may not be applied to H-1B visa applicants''). See also
Serenity Info Tech, Inc. v. Cuccinelli, 461 F. Supp. 3d 1271, 1285
(N.D. Ga. 2020) (citing ITServe).
---------------------------------------------------------------------------

To eliminate the unnecessary duplication of work, DHS also proposes
to eliminate the itinerary requirement for agents acting as petitioners
at current 8 CFR 214.2(h)(2)(i)(F). In proposing to eliminate the
itinerary requirement for agents at paragraph (h)(2)(i)(F), DHS also
proposes to incorporate technical changes to this provision by moving
language currently found in paragraph (h)(2)(i)(F)(2) to paragraph
(h)(2)(i)(F)(1); removing paragraph (h)(2)(i)(F)(2); and redesignating
current paragraph (h)(2)(i)(F)(3) as proposed paragraph
(h)(2)(i)(F)(2). Proposed 8 CFR 214.2(h)(2)(i)(F)(1) would incorporate
the following language currently found in paragraph (h)(2)(i)(F)(2):
``The burden is on the agent to explain the terms and conditions of the
employment and to provide any required documentation. In questionable
cases, a contract between the employers and the beneficiary or
beneficiaries may be required.'' This proposed restructuring at 8 CFR
214.2(h)(2)(i)(F) is intended to simplify and consolidate the guidance
for agents as petitioners following the removal of the itinerary
requirement language.
7. Validity Expires Before Adjudication
DHS proposes to allow H-1B petitions to be approved or have their
requested validity period dates extended if USCIS adjudicates and deems
the petition approvable after the initially requested validity period
end-date, or the period for which eligibility has been established, has
passed. This typically would happen if USCIS deemed the petition
approvable upon a favorable motion to reopen, motion to reconsider, or
appeal. Specifically, under proposed 8 CFR 214.2(h)(9)(ii)(D)(1), if
USCIS adjudicates an H-1B petition and deems it otherwise approvable
after the initially requested validity period end-

[[Page 72883]]

date, or the last day for which eligibility has been established, USCIS
may issue an RFE asking whether the petitioner wants to update the
dates of intended employment.
If in response to the RFE the petitioner confirms that it wants to
update the dates of intended employment and submits a different LCA
that corresponds to the new requested validity dates, even if that LCA
was certified after the date the H-1B petition was filed, and assuming
all other eligibility criteria are met, USCIS would approve the H-1B
petition for the new requested period or the period for which
eligibility has been established, as appropriate, rather than require
the petitioner to file a new or amended petition. The petitioner's
request for new dates of employment and submission of an LCA with a new
validity period that properly corresponds to the revised requested
validity period on the petition and an updated prevailing or proffered
wage, if applicable, would not be considered a material change, except
that the petitioner may not reduce the proffered wage from that
originally indicated in their petition. See proposed 8 CFR
214.2(h)(9)(ii)(D)(1). However, the total petition validity period
would still not be able to exceed 3 years.
Currently, if USCIS adjudicates and deems these types of petitions
approvable after the initially requested validity period, or the last
day for which eligibility has been established, has elapsed, the
petition must be denied. The petitioner is also not able to change the
requested validity period using the same petition. Instead, the
petitioner must file an amended or new petition requesting a new
validity period if they seek to employ or continue to employ the
beneficiary. See 8 CFR 214.2(h)(2)(i)(E) and (h)(11)(i)(A). The
requirement to file an amended or new petition in this circumstance
results in additional filing costs and burden for the petitioner. It
also results in unnecessary expenditures of USCIS resources to intake
and adjudicate another petition, even though the only change generally
is a new requested validity period due to the passage of time. This is
not an efficient use of USCIS or the petitioner's resources. In certain
circumstances this requirement may also result in the H-1B beneficiary
losing their cap number, which generally would be an unequitable result
for a petition that was otherwise approvable.
Aside from changing the requested validity period, the petitioner
would also be able to increase the proffered wage to conform with a new
prevailing wage if the prevailing wage has increased due to the passage
of time. The petitioner would also be able to increase the proffered
wage for other reasons, such as to account for other market wage
adjustments. An increase to the proffered wage would not be considered
a material change, so long as there are no other material changes to
the position. However, a petitioner would not be allowed to reduce the
proffered wage, even if the prevailing wage decreased due to the
passage of time. If the petitioner intends to reduce the proffered wage
or make any other material change to the proposed employment, it would
have to file an amended or new petition in accordance with existing
provisions at 8 CFR 214.2(h)(2)(i)(E) and (h)(11)(i)(A).
Under proposed 8 CFR 214.2(h)(9)(ii)(D), USCIS would not be
required to issue an RFE, as it could instead proceed to approve the
petition for the originally requested period or until the last day for
which eligibility has been established, as appropriate. For example,
USCIS would not be required to issue an RFE when the beneficiary has
already been granted H-1B status through another employer, changed
nonimmigrant status, adjusted status, or has reached their 6-year
limitation on stay, such that an RFE asking the petitioner if they want
to update the requested dates of H-1B employment would serve little or
no purpose. Consistent with these examples, DHS would consider
potential factors that could inform whether USCIS issues an RFE as
including, but not limited to, additional petitions filed or approved
on the beneficiary's behalf, or the beneficiary's eligibility for
additional time in H-1B status. See proposed 8 CFR
214.2(h)(9)(ii)(D)(1) and (2).
Proposed 8 CFR 214.2(h)(9)(ii)(D)(2) provides that if no RFE is
issued concerning the requested dates of employment, or if the
petitioner does not respond, or the response to the RFE does not
support new dates of employment, the petition would be approved, if
otherwise approvable, for the originally requested period or until the
last day for which eligibility has been established, as appropriate.
The last day for which eligibility has been established could, for
example, be the date the beneficiary reached their six-year maximum
limitation on stay, or the end date of the supporting LCA, or one year
from approval in case of temporary licensure. If the petition is
approved for the originally requested period or the last day for which
eligibility has been established, the petition would not be forwarded
to the U.S. Department of State (DOS) nor would any accompanying
request for a COS, extension of stay, or amendment of stay, be granted
because the validity period would have already expired and would
therefore not support issuance of a visa or a grant of status.

B. Benefits and Flexibilities

1. H-1B Cap Exemptions
DHS proposes to revise the requirements to qualify for H-1B cap
exemption under 8 CFR 214.2(h)(8)(iii)(F)(4) when a beneficiary is not
directly employed by a qualifying institution, organization, or entity.
DHS also proposes to revise the definition of ``nonprofit research
organization'' and ``governmental research organization'' under 8 CFR
214.2(h)(19)(iii)(C). These proposed changes are intended to clarify,
simplify, and modernize eligibility for cap-exempt H-1B employment, so
that they are less restrictive and better reflect modern employment
relationships. The proposed changes are also intended to provide
additional flexibility to petitioners to better implement Congress's
intent to exempt from the annual H-1B cap certain H-1B beneficiaries
who are employed at a qualifying institution, organization, or entity.
Congress set the current annual regular cap for the H-1B visa
category at 65,000. See INA section 214(g)(1)(A), 8 U.S.C.
1184(g)(1)(A). Not all H-1B nonimmigrant visas (or grants of H-1B
status) are subject to this annual cap. INA section 214(g)(5) allows
certain employers to employ H-1B nonimmigrant workers without being
subject to the annual numerical cap. See INA section 214(g)(5), 8
U.S.C. 1184(g)(5). For example, INA section 214(g)(5)(A) and (B)
exempts those workers who are employed at an institution of higher
education or a related or affiliated nonprofit entity, a nonprofit
research organization or a governmental research organization. See INA
section 214(g)(5)(A)-(B), 8 U.S.C. 1184(g)(5)(A)-(B).
Currently, DHS regulations state that an H-1B nonimmigrant worker
is exempt from the cap if employed by: (1) an institution of higher
education; (2) a nonprofit entity related to or affiliated with such an
institution; (3) a nonprofit research organization; or (4) a
governmental research organization. See 8 CFR 214.2(h)(8)(iii)(F)(1)
through (3). DHS regulations also state that an H-1B nonimmigrant
worker may be exempt from the cap when they are not ``directly
employed'' by a qualifying institution, organization, or entity, if
they are employed at a qualifying

[[Page 72884]]

institution, organization, or entity so long as: (1) the majority of
the worker's work time will be spent performing job duties at a
qualifying institution, organization, or entity; and (2) the worker's
job duties will directly and predominately further the essential
purpose, mission, objectives or functions of the qualifying
institution, organization or entity. See 8 CFR 214.2(h)(8)(iii)(F)(4).
When relying on this exemption, the H-1B petitioner must also establish
that there is a nexus between the work to be performed and the
essential purpose, mission, objectives, or functions of the qualifying
institution, organization, or entity. Id.
The H-1B cap exemption regulations define ``nonprofit entity,''
``nonprofit research organization,'' and ``governmental research
organization'' at 8 CFR 214.2(h)(8)(iii)(F)(3). For the definition of
``nonprofit entity,'' the regulation adopts the definition at 8 CFR
214.2(h)(19)(iv).\59\ For the definition of ``nonprofit research
organization'' and ``governmental research organization,'' the
regulation adopts the definition at 8 CFR 214.2(h)(19)(iii)(C). The
regulation at 8 CFR 214.2(h)(19)(iii)(C) states that a nonprofit
research organization is ``primarily engaged in basic research and/or
applied research,'' while a governmental research organization is a
Federal, State, or local entity ``whose primary mission is the
performance or promotion of basic research and/or applied research.''
Id.
---------------------------------------------------------------------------

\59\ 8 CFR 214.2(h)(19)(iii) and (iv) pertains to organizations
that are exempt from the ACWIA fee for H-1B petitions.
---------------------------------------------------------------------------

Specifically, DHS proposes to change the phrase ``the majority of''
at 8 CFR 214.2(h)(8)(iii)(F)(4) to ``at least half'' to clarify that H-
1B beneficiaries who are not directly employed by a qualifying
institution, organization, or entity identified in section 214(g)(5)(A)
or (B) of the Act, who equally split their work time between a cap-
exempt entity and a non-cap-exempt entity, may be eligible for cap
exemption. See proposed 8 CFR 214.2(h)(8)(iii)(F)(4). The purpose and
intended effect of the proposed change is to update the standard to
qualify for this cap exemption, as USCIS has historically interpreted
``the majority of'' as meaning more than half.\60\ For example, under
proposed 8 CFR 214.2(h)(8)(iii)(F)(4), a beneficiary who works at a
for-profit hospital and research center that would not otherwise be a
qualifying institution would qualify for this cap exemption if the
beneficiary will spend exactly 50 percent of their time performing job
duties at a qualifying research organization (and those job duties
would further an activity that supports or advances one of the
fundamental purposes, missions, objectives, or functions of the
qualifying research organization). Under the current regulations, the
same beneficiary would not qualify because 50 percent would not meet
the ``majority of'' standard. The application of 8 CFR
214.2(h)(8)(iii)(F)(4) to a beneficiary who is not directly employed by
a qualifying institution, organization, or entity identified in section
214(g)(5)(A) or (B) of the Act would remain unchanged.
---------------------------------------------------------------------------

\60\ See USCIS, Adjudicator's Field Manual (AFM), Chapter
31.3(g)(13), ``Cap Exemptions Pursuant to 214(g)(5) of the Act,''
https://www.uscis.gov/sites/default/files/document/policy-manual-afm/afm31-external.pdf, at 36 (providing an example of a qualifying
H-1B cap-exempt petition where the beneficiary ``will spend more
than half of her time'' working at the qualifying entity). While
USCIS retired the AFM in May 2020, this example nevertheless
illustrates the agency's historical interpretation since at least
June 2006, when chapter 31.3(g)(13) was added. See also USCIS,
Interoffice Memorandum HQPRD 70/23.12, ``Guidance Regarding
Eligibility for Exemption from the H-1B Cap Based on Sec. 103 of
the American Competitiveness in the Twenty-First Century Act of 2000
(AC21) (Pub. L. 106-313)'' (Jun. 6, 2006), https://www.uscis.gov/sites/default/files/document/memos/ac21c060606.pdf.
---------------------------------------------------------------------------

DHS also proposes to revise 8 CFR 214.2(h)(8)(iii)(F)(4) to remove
the requirement that a beneficiary's duties ``directly and
predominately further the essential purpose, mission, objectives or
functions'' of the qualifying institution, organization, or entity and
replace it with the requirement that the beneficiary's duties
``directly further an activity that supports or advances one of the
fundamental purposes, missions, objectives, or functions'' of the
qualifying institution, organization, or entity. See proposed 8 CFR
214.2(h)(8)(iii)(F)(4).\61\ This proposed change is intended to update
the availability of cap exemptions to include beneficiaries whose work
directly contributes to, but does not necessarily predominantly
further, the qualifying organization's fundamental purpose, mission,
objectives, or functions. Further, this proposed change, by revising
``the'' to ``an'', acknowledges that a qualifying organization may have
more than one fundamental purpose, mission, objective, or function, and
this fact should not preclude an H-1B beneficiary from being exempt
from the H-1B cap.
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\61\ Although DHS would replace the word ``essential'' with
``fundamental'' in proposed 8 CFR 214.2(h)(8)(iii)(F)(4), these two
words are synonymous for purposes of cap exemptions. DHS proposes to
use ``fundamental'' in proposed 8 CFR 214.2(h)(8)(iii)(F)(4) in
order to be consistent with current and proposed 8 CFR
214.2(h)(19)(iii).
---------------------------------------------------------------------------

Proposed 8 CFR 214.2(h)(8)(iii)(F)(4) would also eliminate the
sentence stating that the H-1B petitioner has the burden to establish
that there is a nexus between the beneficiary's duties and the
essential purpose, mission, objectives or functions of the qualifying
institution, organization, or entity. Since the petitioner is already
required to establish that the beneficiary's duties further an activity
that supports one of the fundamental purposes, missions, objectives, or
functions of the qualifying entity, it is inherently required to show a
nexus between the duties and the entity's purpose, mission, objections,
or functions, and therefore, the ``nexus'' requirement is redundant.
These proposed changes to 8 CFR 214.2(h)(8)(iii)(F)(4) would provide
more clarity and flexibility for H-1B beneficiaries who will not be
directly employed by a qualifying institution, organization, or entity.
DHS also proposes to clarify that the requirement that the
beneficiary spend at least half of their work time performing job
duties ``at'' a qualifying institution should not be taken to mean the
duties need to be physically performed onsite at the qualifying
institution. DHS is aware that many positions can be performed
remotely. When considering whether such a position is cap-exempt, the
proper focus is on the job duties, rather than where the duties are
performed physically.
DHS also proposes to revise 8 CFR 214.2(h)(19)(iii)(C), which
states that a nonprofit research organization is an entity that is
``primarily engaged in basic research and/or applied research,'' and a
governmental research organization is a Federal, State, or local entity
``whose primary mission is the performance or promotion of basic
research and/or applied research.'' DHS proposes to replace ``primarily
engaged'' and ``primary mission'' with ``a fundamental activity of'' to
permit a nonprofit entity or governmental research organization that
conducts research as a fundamental activity, but is not primarily
engaged in research, or where research is not the primary mission, to
meet the definition of a nonprofit research entity or governmental
research organization. See proposed 8 CFR 214.2(h)(19)(iii)(C).
Reorienting the cap exemptions for nonprofit research organizations and
governmental research organizations to the ``fundamental activity''
construct would align these standards with the current ``fundamental
activity'' standard found for formal written affiliation agreements
under 8 CFR

[[Page 72885]]

214.2(h)(8)(iii)(F)(2)(iv) and (h)(19)(iii)(B)(4), and would bring more
clarity and predictability to decision-making, for both adjudicators
and the regulated community.
DHS acknowledges that the ``primarily'' and ``primary''
requirements at current 8 CFR 214.2(h)(19)(iii)(C) have been in effect
for over a decade for purposes of cap exemptions, and that DHS declined
to make the same changes it is currently proposing in response to
commenters' suggestions when codifying this regulation in 2016.\62\ At
that time, DHS stated ``that maintaining these longstanding
interpretations, which include the `primarily' and `primary'
requirements, will serve to protect the integrity of the cap and fee
exemptions as well as clarify for stakeholders and adjudicators what
must be proven to successfully receive such exemptions.'' \63\ However,
rather than providing clarity, the ``primarily'' and ``primary''
requirements have resulted in inconsistency and confusion surrounding
eligibility for such cap exemptions.\64\
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\62\ As DHS explained in the final rule, the ``primarily'' and
``primary'' requirements ``have been in place since 1998 with regard
to fee exemptions and have been in effect for more than a decade for
purposes of the cap exemptions.'' See ``Retention of EB-1, EB-2, and
EB-3 Immigrant Workers and Program Improvements Affecting High-
Skilled Nonimmigrant Workers,'' 81 FR 82398, 82446 (Nov. 18, 2016).
\63\ Id.
\64\ See, e.g., Open Society Inst. v. USCIS, 2021 WL 4243403, at
*1 (D.D.C. 2021) (``Open Society maintains that on over a dozen
prior occasions USCIS found that Open Society satisfied this
standard but that in 2020 the agency reversed course without
sufficient explanation or sound reason.'').
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In 2015, DHS proposed using the phrase ``primary purpose'' at 8 CFR
214.2(h)(8)(iii)(F)(2)(iv) and (h)(19)(iii)(B)(4) (addressing cap
exemption and ACWIA fee exemption, respectively, for a nonprofit entity
that is related to or affiliated with an institution of higher
education based on a formal written affiliation agreement).\65\ In the
2016 final rule, however, DHS explained that it was not pursuing the
proposed phrase ``primary purpose'' and instead chose to replace it
with ``fundamental activity'' at 8 CFR 214.2(h)(8)(iii)(F)(2)(iv) and
(h)(19)(iii)(B)(4) ``to avoid potential confusion'' and to make it
``clearer that nonprofit entities may qualify for the cap and fee
exemptions even if they are engaged in more than one fundamental
activity, any one of which may directly contribute to the research or
education mission of a qualifying college or university.'' \66\ Even
though DHS declined to concurrently change the ``primarily'' and
``primary'' language at current 8 CFR 214.2(h)(19)(iii)(C), DHS
acknowledges that the ``fundamental activity'' text in current 8 CFR
214.2(h)(8)(iii)(F)(2)(iv) and (h)(19)(iii)(B)(4) did enhance clarity
in the intended manner and believes that current 8 CFR
214.2(h)(19)(iii)(C) would similarly benefit from this proposed change.
---------------------------------------------------------------------------

\65\ See ``Retention of EB-1, EB-2, and EB-3 Immigrant Workers
and Program Improvements Affecting High-Skilled Nonimmigrant
Workers,'' 80 FR 81900 (Dec. 31, 2015) (proposed rule).
\66\ See ``Retention of EB-1, EB-2, and EB-3 Immigrant Workers
and Program Improvements Affecting High-Skilled Nonimmigrant
Workers,'' 81 FR 82398, 82444 (Nov. 18, 2016).
---------------------------------------------------------------------------

In addition, DHS believes that the proposed ``fundamental
activity'' standard would still protect the integrity of the cap. While
changing this terminology may somewhat expand who is eligible for the
cap exemption, it would still require that an employer demonstrate that
research is a ``fundamental activity,'' which is a meaningful limiting
standard. Not every activity an organization engages in would be
considered a ``fundamental activity.'' A fundamental activity would
still have to be an important and substantial activity, although it
need not be the organization's principal or foremost activity as
required under the current ``primary'' construct.\67\ Further, the
organization would still need to meet all the other requirements to
qualify as a nonprofit research organization or governmental research
organization, including engaging in qualifying research as defined in
proposed 8 CFR 214.2(h)(19)(iii)(C), and documenting its tax exempt
status pursuant to proposed 8 CFR 214.2(h)(19)(iv).
---------------------------------------------------------------------------

\67\ See Open Society Inst. v. USCIS, 2021 WL 4243403, at *5
(D.D.C. 2021) (``the ordinary meaning of `primarily' as it is used
in 8 CFR 214.2(h)(19)(iii)(C) is `principally and as distinguished
from incidentally or secondarily.''').
---------------------------------------------------------------------------

DHS believes that the ``primarily'' and ``primary'' requirements at
current 8 CFR 214.2(h)(19)(iii)(C) are too restrictive.\68\ As
explained above, the current ``primarily'' and ``primary'' construct
requires a petitioner to demonstrate that research is its principal
activity, i.e., that research is the main or primary activity.\69\ One
key difference between the current and proposed standard is that an
employer could have more than one ``fundamental activity,'' whereas the
``primary'' or ``primarily'' standard requires that research is the
employer's foremost and main activity. This proposed change
acknowledges the reality that nonprofit organizations may engage in
several important activities. The proposed change modernizes the
definition of ``nonprofit research organization'' and ``governmental
research organization'' to include entities that may assist with
aspects of research throughout the research cycle despite not being
primarily engaged in performing the research. For example, a nonprofit
organization with a mission to eradicate malaria that engages in
lobbying, public awareness, funding medical research, and performing
its own research on the efficacy of various preventative measures, may
qualify for H-1B cap exemption even if it was not primarily engaged in
research. In this example, the organization would still qualify for the
cap exemption if research were one of several ``fundamental
activities'' of the organization, as opposed to its primary mission.
Similarly, a governmental research organization that engages in
semiconductor manufacturing research and development could qualify for
H-1B cap exemption if research is a fundamental activity of the
organization. Under the proposed rule, the organization may be eligible
for cap exemptions if research is one of its fundamental activities as
opposed to its primary activity.
---------------------------------------------------------------------------

\68\ Multiple comments leading to the 2016 final rule also
expressed concern that the ``primary purpose'' requirement was too
restrictive, although in the context of 8 CFR
214.2(h)(8)(ii)(F)(2)(iv) and (h)(19)(iii)(B)(4). 81 FR at 82403.
\69\ See Open Society Institute v. USCIS, 2021 WL 4243403, at
*4-5 (D.D.C. 2021) (The court examined AAO's analysis of the term
``primarily engaged'' and the AAO's conclusion that ``a nonprofit
organization is ``primarily engaged'' in research if, and only if,
it is ```directly and principally' engaged in research'': ``. . .
[While] [Open Society] is `focused on research--researching problems
in the world, researching possible solutions for those problems, and
researching how to implement those solutions,' the regulation at 8
CFR 214.2(h)(19)(iii)(C) defines a nonprofit research organization
as one that is `primarily engaged' in research, which we interpret
to mean directly and principally engaged in research. Based on the
totality of evidence in the record, and considering its research
activities in proportion to its other activities, we conclude that
the record does not demonstrate that [Open Society] is directly and
principally engaged in research. The research conducted by [Open
Society] is incidental, or, at best, secondary to its principal
activities: making grants to promote social, legal and economic
reforms.' '') (changes in original).
---------------------------------------------------------------------------

DHS also proposes to revise 8 CFR 214.2(h)(19)(iii)(C) to state
that a ``nonprofit research organization or governmental research
organization may perform or promote more than one fundamental
activity.'' See proposed 8 CFR 214.2(h)(19)(iii)(C). This proposed
change would align with DHS's position that a nonprofit entity may
engage in more than one fundamental activity under current 8 CFR

[[Page 72886]]

214.2(h)(8)(iii)(F)(2)(iv),\70\ which DHS seeks to codify at proposed 8
CFR 214.2(h)(8)(iii)(F)(2)(iv) and (h)(19)(iii)(B)(4) as well. DHS
believes it should apply the same standard that an entity may engage in
more than one fundamental activity, regardless of whether that entity
is requesting cap exemption as an ``affiliated or related nonprofit
entity'' or a ``nonprofit research organization or governmental
research organization.''
---------------------------------------------------------------------------

\70\ Id. at 82445 (``DHS emphasizes that a nonprofit entity may
meet this definition even if it is engaged in more than one
fundamental activity, so long as at least one of those fundamental
activities is to directly contribute to the research or education
mission of a qualifying college or university.'').
---------------------------------------------------------------------------

Finally, DHS proposes to add language that both basic and applied
research may also include ``designing, analyzing, and directing the
research of others if on an ongoing basis and throughout the research
cycle.'' See proposed 8 CFR 214.2(h)(19)(iii)(C).
Taken together, these proposed changes clarify, simplify, and
modernize eligibility for cap-exempt H-1B employment.\71\ DHS's
proposed changes to 8 CFR 214.2(h)(8)(iii)(F)(4) and (h)(19)(iii)(C)
provide additional flexibility to exempt from the H-1B cap certain H-1B
beneficiaries who are employed at a qualifying institution,
organization, or entity. These changes are consistent with the language
of the statute at INA section 214(g)(5)(A) through (B) and would
further the INA's goals of improving economic growth and job creation
by facilitating U.S. employers' access to high-skilled workers,
particularly at these institutions, organizations, and entities.\72\
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\71\ These proposed changes would also impact eligibility for
exemption from the ACWIA fees applicable to initial cap-subject
petitions. The definitions of ``nonprofit research organization''
and ``governmental research organization'' at 8 CFR
214.2(h)(19)(iii)(C), and ``nonprofit entity'' at 8 CFR
214.2(h)(19)(iv), would continue to apply to which entities are
exempt from the H-1B- cap as well as which entities are exempt from
the additional ACWIA fee.
\72\ See S. Rep. No. 260, 106th Cong., 2nd Sess. (Apr. 11,
2000), at 10 (AC21 sought to help the American economy by, in part,
exempting from the H-1B cap ``visas obtained by universities,
research facilities, and those obtained on behalf of graduate degree
recipients to help keep top graduates and educators in the
country.'' See also ``Retention of EB-1, EB-2, and EB-3 Immigrant
Workers and Program Improvements Affecting High-Skilled Nonimmigrant
Workers,'' 81 FR 82398, 82447 (Nov. 18, 2016) (``DHS believes that
its policy extending the cap exemption to individuals employed `at'
and not simply employed `by' a qualifying institution, organization
or entity is consistent with the language of the statute and
furthers the goals of AC21 to improve economic growth and job
creation by immediately increasing U.S. access to high-skilled
workers, and particularly at these institutions, organizations, and
entities.'').
---------------------------------------------------------------------------

DHS further proposes to amend the definition of ``nonprofit or tax
exempt organizations'' by eliminating 8 CFR 214.2(h)(19)(iv)(B), which
currently requires that the petitioner provide evidence that it ``[h]as
been approved as a tax exempt organization for research or educational
purposes by the Internal Revenue Service.'' In its experience, USCIS
has found that Internal Revenue Service (IRS) letters generally do not
identify the reasons why an entity received approval as a tax exempt
organization, so current 8 CFR 214.2(h)(19)(iv)(B) imposes an
evidentiary requirement that is unduly difficult to meet. Proposed 8
CFR 214.2(h)(19)(iv) would more simply state that a nonprofit
organization or entity ``must be determined by the Internal Revenue
Service as a tax exempt organization under the Internal Revenue Code of
1986, section 501(c)(3) (c)(4), or (c)(6), 26 U.S.C. 501(c)(3), (c)(4),
or (c)(6).'' While this change would remove the requirement that the
IRS letter itself state that the petitioner's approval as a tax exempt
organization was ``for research or educational purposes,'' DHS is not
proposing to eliminate or otherwise change the overarching requirement
that a qualifying nonprofit or tax exempt petitioner be an institution
of higher education or a related or affiliated nonprofit entity, or a
nonprofit research organization or a governmental research organization
institution, as required by the regulations and INA section 214(g)(5).
The petitioner would still need to submit documentation to demonstrate
that it meets such a requirement, except that the submitted
documentation would not need to be in the form of an IRS letter.
2. Automatic Extension of Authorized Employment Under 8 CFR
214.2(f)(5)(vi) (Cap-Gap)
DHS proposes to revise 8 CFR 214.2(f)(5)(vi) to provide an
automatic extension of duration of status and post-completion OPT or
24-month extension of post-completion OPT, as applicable, until April 1
of the relevant fiscal year for which the H-1B petition is requested.
See proposed 8 CFR 214.2(f)(5)(vi). Currently, the automatic extension
is valid only until October 1 of the fiscal year for which H-1B status
is being requested. This change would result in more flexibility for
both students and USCIS and would help to avoid disruption to U.S.
employers that are lawfully employing F-1 students while a qualifying
H-1B cap-subject petition is pending. As an added integrity measure,
DHS proposes to specify that the H-1B petition must be ``nonfrivolous''
in order for the student to benefit from the cap-gap extension. See
proposed 8 CFR 214.2(f)(5)(vi)(A)(3).
Each year, a number of U.S. employers seek to employ F-1 students
via the H-1B program by requesting a COS and filing an H-1B cap
petition with USCIS. Because petitioners may not file H-1B petitions
more than six months before the date of actual need for the
employee,\73\ the earliest date an H-1B cap-subject petition may be
filed for a given fiscal year is April 1, six months prior to the start
of the applicable fiscal year for which initial H-1B classification is
sought. Many F-1 students complete a program of study or post-
completion OPT in mid-spring or early summer. Per current regulations,
after completing their program or post-completion OPT, F-1 students
have 60 days to depart the United States or take other appropriate
steps to maintain a lawful status. See 8 CFR 214.2(f)(5)(iv). However,
because the change to H-1B status cannot occur earlier than October 1,
an F-1 student whose program or post-completion OPT expires in mid-
spring has two or more months following the 60-day period before the
authorized period of H-1B status can begin. To address this situation,
commonly known as the ``cap-gap,'' DHS established regulations that
automatically extended F-1 Duration of Status (D/S) and, if applicable,
post-completion OPT employment authorization to October 1 for eligible
F-1 students. See 8 CFR 214.2(f)(5)(vi). The extension of F-1 D/S and
OPT employment authorization is commonly known as the ``cap-gap
extension.''
---------------------------------------------------------------------------

\73\ See 8 CFR 214.2(h)(2)(i)(I).
---------------------------------------------------------------------------

DHS proposes to further extend F-1 status and post-completion OPT,
including STEM OPT, in this context.\74\ Under current regulations, the
automatic cap-gap extension is valid only until October 1 of the fiscal
year for which H-1B status is being requested. See 8 CFR
214.2(f)(5)(vi). When the October 1 extension was initially promulgated
through an interim final rule in 2008, DHS considered it an
administrative solution to bridge the gap between the end of the
academic year and the beginning of the fiscal year, when the student's
H-1B status typically would begin.\75\ When this

[[Page 72887]]

provision was finalized in 2016, DHS responded to commenters requesting
that DHS revise the cap-gap provision so as to automatically extend
status and employment authorization ``until adjudication of such H-1B
petition is complete.'' \76\ Commenters stated that an extension until
October 1 might have been appropriate in the past, when H-1B petitions
were adjudicated well before that date, but USCIS workload issues at
the time the rule was promulgated and the need to respond to RFEs
delayed such adjudications beyond October 1.\77\ DHS responded that it
recognized that some cap-subject H-1B petitions remain pending on or
after October 1 of the relevant fiscal year, but that USCIS prioritizes
petitions seeking a COS from F-1 to H-1B, which normally results in the
timely adjudication of these requests, so the vast majority of F-1
students changing status to H-1B do not experience any gap in
status.\78\ DHS also explained that it was concerned that extending
cap-gap employment authorization beyond October 1 would reward
potentially frivolous filings that would enable students who may
ultimately be found not to qualify for H-1B status to continue to
benefit from the cap-gap extension and that the October 1 cut-off
serves to prevent possible abuse of the cap-gap extension.\79\
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\74\ DHS previously proposed extending the cap-gap period, but
the proposed rule was never finalized and was subsequently
withdrawn. See ``Establishing a Fixed Time Period of Admission and
an Extension of Stay Procedure for Nonimmigrant Academic Students,
Exchange Visitors, and Representatives of Foreign Information
Media,'' 85 FR 60526 (Sept. 25, 2020) (withdrawn by 86 FR 35410
(July 6, 2021)).
\75\ See ``Extending Period of Optional Practical Training by 17
Months for F-1 Nonimmigrant Students With STEM Degrees and Expanding
Cap-Gap Relief for All F-1 Students With Pending H-1B Petitions,''
73 FR 18944 (Apr. 8, 2008).
\76\ See ``Improving and Expanding Training Opportunities for F-
1 Nonimmigrant Students With STEM Degrees and Cap-Gap Relief for All
Eligible F-1 Students,'' 81 FR 13039, 13100 (Mar. 11, 2016).
\77\ See 81 FR 13040, 13101 (Mar. 11, 2016).
\78\ Id.
\79\ Id.
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DHS has reconsidered its position in light of recent adjudication
delays and to avoid potential disruptions in employment authorization.
With the consistently high volume of cap-subject H-1B petitions filed
within a short period of time each year and the long timeframes
afforded to respond to RFEs, USCIS has, in some years, been unable to
complete the adjudication of all H-1B cap-subject petitions by October
1. This has resulted in situations where some individuals must stop
working on October 1 because the employment authorization provided
under 8 CFR 214.2(f)(5)(vi) ends on that date, although these
individuals generally have been allowed to remain in the United States
in an authorized period of stay while the H-1B petition and COS
application is pending.
To account for this operational issue, DHS is proposing to revise 8
CFR 214.2(f)(5)(vi) to provide an automatic extension of F-1 status and
post-completion OPT, or 24-month extension of post-completion OPT, as
applicable, until April 1 of the fiscal year for which the H-1B
petition is filed, or until the validity start date of the approved H-
1B petition, whichever is earlier. This provision would extend the
student's F-1 status and employment authorization, as applicable,
automatically if a nonfrivolous H-1B petition requesting a COS is
timely filed on behalf of the F-1 student. See proposed 8 CFR
214.2(f)(5)(vi)(A). However, if the F-1 student's COS request is still
pending at the end of the cap-gap period, then their employment
authorization would terminate on March 31, and the F-1 student would no
longer be authorized for employment on this basis as of April 1 of the
fiscal year for which H-1B classification is sought. If the H-1B
petition underlying the cap-gap extension is denied before April 1,
then, consistent with existing USCIS practice, the F-1 beneficiary of
the petition, as well as any F-2 dependents, would generally receive
the standard F-1 grace period of 60 days to depart the United States or
take other appropriate steps to maintain a lawful status.\80\ If the H-
1B petition is still pending on April 1, then the beneficiary of the
petition is no longer authorized for OPT and the 60-day grace period
begins on April 1. The F-1 beneficiary may not work during the 60-day
grace period.
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\80\ See 8 CFR 214.2(f)(5)(iv).
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Changing the automatic extension end date from October 1 to April 1
of the relevant fiscal year would prevent the disruptions in employment
authorization that some F-1 nonimmigrants seeking cap-gap extensions
have experienced over the past several years. DHS recognizes the
hardships that a disruption in employment authorization could cause to
both the affected individual and their employer and seeks to prevent
potential future disruptions by extending cap-gap relief. According to
USCIS data for FY 2016-22, USCIS has adjudicated approximately 99
percent of H-1B cap-subject petitions requesting a COS from F-1 to H-1B
by April 1 of the relevant fiscal year.\81\ As a result of this
proposed cap-gap extension, DHS expects USCIS would be able to
adjudicate nearly all H-1B cap-subject petitions requesting a COS from
F-1 to H-1B by the April 1 deadline.
---------------------------------------------------------------------------

\81\ USCIS, OP&S Policy Research Division (PRD), Computer-Linked
Application Information Management System 3 (C3) database, Oct. 27,
2022. PRD187.
---------------------------------------------------------------------------

In addition to avoiding employment disruptions, the lengthier
extension of F-1 status and post-completion OPT or 24-month extension
of post-completion OPT employment authorization for students with
pending H-1B petitions until April 1, which is one year from the
typical initial cap filing start date, accounts for USCIS' competing
operational considerations and would enable the agency to balance
workloads more appropriately for different types of petitions.
Although DHS previously expressed the concern that extending cap-
gap employment authorization could potentially enable students who
ultimately may be found not to qualify for H-1B status to continue to
benefit from the cap-gap extension,\82\ and thus encourage frivolous
filings, DHS has reconsidered its position. It is now DHS's position
that extending the cap-gap period would not significantly increase the
risk of frivolous filings. Because there is no way of knowing whether
USCIS would complete adjudication of a petition before October 1 or
April 1 of the fiscal year, there should be little incentive to submit
a frivolous filing solely to obtain the longer cap-gap extension
period. The H-1B petition would still have to be filed with all
appropriate fees, which can be substantial for an initial cap filing.
Moreover, if the petition is denied, the beneficiary's cap-gap
eligibility ends immediately. Accordingly, frivolous petitions or
petitions filed solely to obtain cap-gap protections would run the risk
of simply being denied prior to October 1. This would result in no
additional benefit from the expanded timeframe. Any risk of fraud is
already inherent in providing cap-gap relief itself, and DHS is unaware
of any additional risk presented by extending the cap-gap period. DHS
proposes to explicitly state that the H-1B petition must be
nonfrivolous at proposed 8 CFR 214.2(f)(5)(vi)(A)(3) to further deter
frivolous filings. This would bolster integrity because if USCIS
determines the filing to be frivolous, then the beneficiary would not
have qualified for the cap-gap protection and may be deemed to have
failed to maintain status and, if applicable, worked without
authorization. Given the importance of ensuring that the United States
attracts and retains top talent from around the globe, DHS believes
that the benefits of this proposed cap-gap extension far outweigh the
risk of abuse.
---------------------------------------------------------------------------

\82\ See 81 FR 13039, 13101 (Mar. 11, 2016).
---------------------------------------------------------------------------

3. Start Date Flexibility for Certain H-1B Cap-Subject Petitions
DHS proposes to eliminate all the text currently at 8 CFR
214.2(h)(8)(iii)(A)(4), which relates to a limitation on the

[[Page 72888]]

requested start date, because the current regulatory language is
ambiguous.\83\ DHS's proposal to eliminate the current language at 8
CFR 214.2(h)(8)(iii)(A)(4) would provide clarity and flexibility to
employers with regard to the start date listed on H-1B cap-subject
petitions. This proposal also would align the regulations related to H-
1B cap-subject petitions with current USCIS practice, which is to
permit a requested petition start date of October 1 or later, as long
as the requested petition start date does not exceed six months beyond
the filing date of the petition, even during the initial registration
period.\84\ Other restrictions on the petition start date would remain
in place, such as the requirement that a petition may not be filed
earlier than six months before the date of actual need. See 8 CFR
214.2(h)(2)(i)(I). Additionally, a petitioner may file an H-1B cap-
subject petition on behalf of a registered beneficiary for a particular
fiscal year only after the petitioner's registration for that
beneficiary has been selected for that fiscal year. See 8 CFR
214.2(h)(8)(iii)(A)(1).
---------------------------------------------------------------------------

\83\ DHS is proposing new language at 8 CFR
214.2(h)(8)(iii)(A)(4) about selecting registrations based on unique
beneficiaries. DHS discusses this proposal in detail in the preamble
section describing the proposed changes to the H-1B registration
system.
\84\ See USCIS, ``H-1B Electronic Registration Process,''
https://www.uscis.gov/working-in-the-united-states/temporary-workers/h-1b-specialty-occupations-and-fashion-models/h-1b-electronic-registration-process (petitioners with a selected
registration ``must indicate a start date of Oct. 1 . . . . or
later'') (last visited Nov. 10, 2022).
---------------------------------------------------------------------------

The current regulation at 8 CFR 214.2(h)(8)(iii)(A)(4) states, ``A
petitioner may submit a registration during the initial registration
period only if the requested start date for the beneficiary is the
first day for the applicable fiscal year.'' This language is ambiguous
as to whether the ``requested start date'' is the start date of the
registration or the petition. This has led to confusion as the H-1B cap
registration system currently does not ask for the requested start date
for the beneficiary. The start date would only be relevant upon the
filing of the petition, but the regulation refers to submitting ``a
registration with a requested start date.'' Further, current 8 CFR
214.2(h)(8)(iii)(A)(4) states that, ``If USCIS keeps the registration
period open beyond the initial registration period, or determines that
it is necessary to re-open the registration period, a petitioner may
submit a registration with a requested start date after the first
business day for the applicable fiscal year.'' Given the potential for
multiple registration periods, however, the current regulation is
potentially confusing regarding the intended start date and what start
date a petitioner is permitted to request on a cap-subject petition.
As stated above, DHS's proposal to eliminate the current language
at 8 CFR 214.2(h)(8)(iii)(A)(4) would provide clarity and flexibility
to employers. The need to eliminate potential confusion regarding
permissible requested start dates on cap-subject petitions emerged
during the FY 2021 registration and filing season, the first year of
the electronic registration process. The electronic registration period
for FY 2021 ran from March 1, 2020, to March 20, 2020. First, USCIS
selected registrations submitted on behalf of all beneficiaries,
including those eligible for the advanced degree exemption. USCIS then
selected from the remaining registrations a sufficient number projected
to reach the advanced degree exemption. The selection process was
completed on March 27, 2020, and USCIS began to notify employers of
selection results. The initial petition filing period began on April 1,
2020, and lasted 90 days. Due to multiple factors occurring during the
FY 2021 registration and initial filing period (most notably that it
was the first year that the electronic registration system was in place
as well as it being the early months of the COVID-19 pandemic with its
unforeseen consequences), USCIS received fewer petitions than projected
as needed to reach the numerical allocations under the statutory cap
and advanced degree exemption. In August 2020, USCIS selected
additional registrations and permitted those prospective petitioners
with a selected registration or registrations to file petitions before
November 16, 2020. Due to the additional selection period, the filing
window went beyond October 1, leading some petitioners to indicate a
start date after October 1, 2020.
Although USCIS permitted employers to file petitions after October
1, 2020, USCIS rejected or administratively closed many petitions that
did not list a start date of October 1, 2020, pursuant to current 8 CFR
214.2(h)(8)(iii)(A)(4). As a result, many petitioners had to backdate
the requested start date on the petition, even though the start date
listed on the petition consequently may have been before the start date
identified on the accompanying LCA. On June 23, 2021, USCIS announced
its reconsideration of those rejected or administratively closed
petitions.\85\ The agency announced that it would permit petitioners to
resubmit any FY 2021 H-1B cap-subject petitions that were rejected or
administratively closed solely because the petition requested a start
date after October 1, 2020.
---------------------------------------------------------------------------

\85\ See USCIS, ``USCIS Will Allow Resubmission of Certain FY
2021 H-1B Petitions Rejected or Closed Due to Start Date,'' https://www.uscis.gov/news/alerts/uscis-will-allow-resubmission-of-certain-fy-2021-h-1b-petitions-rejected-or-closed-due-to-start-date (last
visited Jan. 26, 2023).
---------------------------------------------------------------------------

The proposed changes would eliminate the language at current 8 CFR
214.2(h)(8)(iii)(A)(4), which would clarify for petitioners that they
may file H-1B cap-subject petitions with requested start dates that are
after October 1 of the relevant fiscal year. This is consistent with
current USCIS policy and would eliminate the potential confusion
resulting from the current regulation with regard to permissible start
dates for employers submitting H-1B cap-subject petitions.\86\ While
the requested start date may be later than October 1, it must be six
months or less from the date the petition is filed.\87\ If the
requested start date is more than six months after the petition is
filed, the petition will be denied or rejected.\88\
---------------------------------------------------------------------------

\86\ See USCIS, ``H-1B Electronic Registration Process'' (last
reviewed/updated Apr. 25, 2022), https://www.uscis.gov/working-in-the-united-states/temporary-workers/h-1b-specialty-occupations-and-fashion-models/h-1b-electronic-registration-process (Q4: ``If we
selected your registration, you must indicate a start date of Oct. 1
. . . or later.'').
\87\ See 8 CFR 214.2(h)(2)(i)(I).
\88\ See id.
---------------------------------------------------------------------------

DHS's proposal to eliminate the current language at 8 CFR
214.2(h)(8)(iii)(A)(4) would not affect the requirement that an H--1B
cap-subject petition must be based on a valid registration for the same
beneficiary and the same fiscal year. This requirement is reflected in
existing USCIS guidance \89\ and the current regulation at 8 CFR
214.2(h)(8)(iii)(A)(1), which states that ``A petitioner may file an H-
1B cap-subject petition on behalf of a registered beneficiary only
after the petitioner's registration for that beneficiary has been
selected for that fiscal year.'' While DHS intends to remove this
particular sentence at proposed 8 CFR 214.2(h)(8)(iii)(A)(1) to reflect
changes resulting from the beneficiary-centric selection process, DHS
proposes to add the same requirement that the registration and petition
be for the same fiscal year by adding ``for the same fiscal

[[Page 72889]]

year'' to the immediately preceding sentence discussing the eligibility
requirements to file an H--1B cap-subject petition based on the
registration. Thus, proposed 8 CFR 214.2(h)(8)(iii)(A)(1) would state,
``To be eligible to file a petition for a beneficiary who may be
counted against the H-1B regular cap or the H-1B advanced degree
exemption for a particular fiscal year, a registration must be properly
submitted in accordance with 8 CFR 103.2(a)(1), paragraph (h)(8)(iii)
of this section, and the form instructions, for the same fiscal year.''
---------------------------------------------------------------------------

\89\ See USCIS, ``H-1B Specialty Occupations, DOD Cooperative
Research and Development Project Workers, and Fashion Models,''
https://www.uscis.gov/working-in-the-united-states/h-1b-specialty-occupations (``A cap-subject H-1B petition will not be considered to
be properly filed unless it is based on a valid, selected
registration for the same beneficiary and the appropriate fiscal
year''.).
---------------------------------------------------------------------------

C. Program Integrity

1. The H-1B Registration System
Through issuance of a final rule in 2019, Registration Requirement
for Petitioners Seeking To File H-1B Petitions on Behalf of Cap-Subject
Aliens, DHS developed a new way to administer the H-1B cap selection
process to streamline processing and provide overall cost savings to
employers seeking to file H-1B cap-subject petitions.\90\ In 2020,
USCIS implemented the first electronic registration process for the FY
2021 H-1B cap. In that year, prospective petitioners seeking to file H-
1B cap-subject petitions (including for beneficiaries eligible for the
advanced degree exemption) were required to first electronically
register and pay the associated H-1B registration fee for each
prospective beneficiary.
---------------------------------------------------------------------------

\90\ See ``Registration Requirement for Petitioners Seeking To
File H-1B Petitions on Behalf of Cap-Subject Aliens,'' 84 FR 888
(Jan. 31, 2019).
---------------------------------------------------------------------------

Under this process, prospective petitioners (also known as
registrants) that seek to employ H-1B cap-subject workers must complete
a registration process that requires only basic information about the
prospective petitioner and each requested worker. The H-1B selection
process is then run on properly submitted electronic registrations.
Only those with valid selected registrations are eligible to file H-1B
cap-subject petitions.
Per regulation, USCIS takes into account historical data related to
approvals, denials, revocations, and other relevant factors to
calculate the number of petitions needed to meet the H-1B cap for a
given fiscal year.\91\ In making this calculation, USCIS considers the
number of registrations that need to be selected to receive the
projected number of petitions required to meet the numerical
limitations.
---------------------------------------------------------------------------

\91\ See 8 CFR 214.2(h)(8)(iii)(E).
---------------------------------------------------------------------------

As stated in the proposed rule for the registration requirement,
DHS proposed this new process, ``to reduce costs for petitioners who
currently spend significant time and resources preparing petitions and
supporting documentation for each intended beneficiary without knowing
whether such petitions will be accepted for processing by USCIS due to
the statutory allocations.'' \92\ DHS also explained that the
registration process, ``would help to alleviate administrative burdens
on USCIS service centers that process H-1B petitions since USCIS would
no longer need to physically receive and handle hundreds of thousands
of H-1B petitions (and the accompanying supporting documentation)
before conducting the random selection process.'' \93\ Several
stakeholders commented favorably on this proposal, noting that the
registration requirement would ``reduce waste and increase
efficiency,'' as well as ``relieve uncertainty for employers and
employees, and mitigate burdens on USCIS.'' \94\ The H-1B electronic
registration process continues to be well-received by users, who
provided a high satisfaction score with the system for FY 2023 (4.84
out of 5) \95\ and FY 2022 (4.87 out of 5).\96\
---------------------------------------------------------------------------

\92\ See ``Registration Requirement for Petitioners Seeking To
File H-1B Petitions on Behalf of Cap-Subject Aliens,'' 83 FR 62406,
62407 (Dec. 3, 2018).
\93\ Id. at 62407-08.
\94\ See ``Registration Requirement for Petitioners Seeking To
File H-1B Petitions on Behalf of Cap-Subject Aliens,'' 84 FR 888,
897 (Jan. 31, 2019).
\95\ See USCIS, ``H-1B Electronic Registration Process'' (last
updated Apr. 25, 2022), https://www.uscis.gov/working-in-the-united-states/temporary-workers/h-1b-specialty-occupations-and-fashion-models/h-1b-electronic-registration-process.
\96\ See American Immigration Lawyers Association, ``USCIS
Provides FY2022 H-1B Cap Registration Process Update,'' https://www.aila.org/infonet/fy2022-h-1b-cap-registration-process-update.
---------------------------------------------------------------------------

As DHS noted in the final rule implementing the registration
system, USCIS has authority to collect sufficient information for each
registration to mitigate the risk that the registration system will be
flooded with frivolous registrations.\97\ For example, USCIS requires
each registrant to complete an attestation and noted in the final rule
that ``individuals or entities who falsely attest to the bona fides of
the registration and submitted frivolous registrations may be referred
to appropriate Federal law enforcement agencies for investigation and
further action as appropriate.'' \98\ DHS revised this attestation
prior to the FY 2023 cap season, by adding a certification (to which
the registrant must attest before submission) that the registration
reflects a legitimate job offer, and that the registrant has ``not
worked with, or agreed to work with, another registrant, petitioner,
agent, or other individual or entity to submit a registration to
unfairly increase chances of selection for the beneficiary or
beneficiaries in this submission.'' \99\ DHS continues to take steps
against potential abuse and is in the process of investigating
potential malfeasance and possible referrals to law enforcement
agencies. However, the time needed to pursue potential bad actors
supports an alternative solution. As a result, DHS has determined that
a more effective way to ensure that the registration system continues
to serve its purpose of fair and orderly administration of the annual
H-1B numerical allocations would be to structurally limit the potential
for bad actors to game the system by changing the selection process so
that it selects by unique beneficiary rather than by registration.
---------------------------------------------------------------------------

\97\ See ``Registration Requirement for Petitioners Seeking To
File H-1B Petitions on Behalf of Cap-Subject Aliens,'' 84 FR 888,
900, 904 (Jan. 31, 2019).
\98\ See id. at 900.
\99\ See Office of Management and Budget (OMB) Control Number
1615-0144, Information Collection Request Reference Number 202202-
1615-005, supplementary document ``H-1B Registration Tool Copy
Deck,'' https://www.reginfo.gov/public/do/PRAViewDocument?ref_nbr=202202-1615-005 (received by OMB's Office of
Information and Regulatory Affairs (OIRA) Feb. 28, 2022, and
approved without change Aug. 8, 2022).
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As detailed in the table below, DHS has seen an increase in the
number of beneficiaries with multiple registrations submitted on their
behalf, an increase in the number and percentage of registrations
submitted for beneficiaries with multiple registrations, an increase in
the number of beneficiaries having five or more registrations submitted
on their behalf, and a substantial increase in the total number of
registrations submitted for a unique individual.
BILLING CODE 9111-97-P

[[Page 72890]]

[GRAPHIC] [TIFF OMITTED] TP23OC23.007

While DHS recognizes that simply being the beneficiary of multiple
registrations is not necessarily indicative of fraud or misuse, as
beneficiaries may legitimately have multiple job offers by different
employers that are not working together to game the system, it is still
worth noting the significant increase in individuals with multiple
registrations for FY22 and FY23. For instance, while DHS is aware that
multiple petitioners may submit registrations for a highly qualified
beneficiary, it raises red flags if one beneficiary has 41 or 83
registrations submitted on their behalf, which occurred in FY22 and
FY23, respectively.
Under current regulations, there is no limit on the number of
registrations that may be submitted on behalf of one unique individual
by different registrants. DHS is not proposing to limit the number of
registrations that may be submitted on behalf of a unique individual by
different registrants, provided that the registrants are not working
with (or have not agreed to work with) another registrant, petitioner,
agent, or other individual or entity to submit a registration to
unfairly increase the chances of selection for a beneficiary. However,
the data show that multiple registrations on behalf of the same
individual are increasing. DHS is concerned that this increase in
multiple registrations may indicate strategic behavior by registrants
(and beneficiaries working with registrants) to submit increasing
numbers of registrations, which may be frivolous, to greatly increase a
beneficiary's chance of selection. This negatively affects the
integrity of the registration system and selection process.
DHS is concerned that individuals with large numbers of
registrations submitted on their behalf are potentially misusing the
registration system to increase their chances of selection and that the
registrations submitted may not represent legitimate job offers. The
possible effect of this increase in multiple registrations, which
potentially do not represent legitimate job offers, is to skew the
selection process. Beneficiaries who have multiple registrations
submitted on their behalf have a significantly higher chance of
selection. At the same time, an individual's chance of selection with a
single registration is greatly reduced, as the number of beneficiaries
with multiple registrations increases.

[[Page 72891]]

[GRAPHIC] [TIFF OMITTED] TP23OC23.008

[[Page 72892]]

[GRAPHIC] [TIFF OMITTED] TP23OC23.009

[[Page 72893]]

[GRAPHIC] [TIFF OMITTED] TP23OC23.010

Registration data also show patterns of groups of companies
submitting registrations for the same groups of beneficiaries. When
selected, these companies then go on to file a minimal number of
petitions compared to the number of registrations they submitted for
those beneficiaries. The following tables exemplify how one group of
companies has submitted large numbers of registrations for a smaller
number of common beneficiaries over three fiscal years, with the vast
majority of their total registrations made up of beneficiaries for whom
other companies in the group also submitted registrations.

[[Page 72894]]

[GRAPHIC] [TIFF OMITTED] TP23OC23.011

[[Page 72895]]

[GRAPHIC] [TIFF OMITTED] TP23OC23.012

[[Page 72896]]

[GRAPHIC] [TIFF OMITTED] TP23OC23.013

The degree of duplication between the companies raises concern that
the companies are working with each other to increase their chances of
selection. This coupled with the fact that the companies routinely have
over 150 registrations selected each year, but only file between 1 and
19 petitions, suggests that the registrations submitted by the
companies for the duplicate beneficiaries may not have represented
legitimate, bona fide offers of employment. This practice creates a
disadvantage for companies that are adhering to the requirements of the
registration and selection process.
Although there may have been legitimate reasons why a company did
not file a petition for a beneficiary whose registration was selected,
the non-filing rates for beneficiaries with multiple registrations is
significantly higher than that of beneficiaries with single
registrations. The non-filing rates for beneficiaries with multiple
registrations raises the question of whether these companies actually
intended to file an H-1B petition on behalf of the beneficiary when
they submitted their registrations and did not work with others to
unfairly improve their chance of selection, as they attested to on the
Registration Tool when each registration was submitted.

[[Page 72897]]

[GRAPHIC] [TIFF OMITTED] TP23OC23.014

BILLING CODE 9111-97-C
The registration data also show that the companies with the highest
rates of non-filing submitted a high percentage of registrations for
beneficiaries with multiple registrations. In FY23, 97 companies with
10 or more selections had a non-filing rate of 90 percent or greater.
Of those 97, the average rate of common beneficiaries among them was
90.72 percent. Eighteen of the 97 companies had a common beneficiary
rate of 100 percent. Amongst these 97 companies, the average number of
registrations per beneficiary was 8.03. In contrast, the companies with
10 or more selections and a non-filing rate of 10 percent or less, of
which there were 667, had an average rate of common beneficiaries of
8.01 percent and submitted registrations for beneficiaries who had an
average of 1.40 registrations per beneficiary.
Stakeholders have also identified opportunities for improving the
registration system in response to a DHS Request for Public Input.\100\
For instance, several commenters suggested running the selection
process based on unique beneficiaries instead of registrations to give
all beneficiaries an equal playing field, which is what DHS is
proposing with the beneficiary-centric option described below.
Commenters also made general suggestions to strengthen the consequences
of submitting frivolous registrations, which DHS agrees with and has
expanded upon in its proposals.
---------------------------------------------------------------------------

\100\ See ``Identifying Barriers Across U.S. Citizenship and
Immigration Services (USCIS) Benefits and Services; Request for
Public Input,'' 86 FR 20398 (Apr. 19, 2021).
---------------------------------------------------------------------------

DHS has a strong interest in ensuring that the annual numerical
allocations are going to petitioners that truly intend to employ an H-
1B worker, rather than prospective petitioners using the registration
system as a relatively cheap placeholder for the possibility that they
may want to employ an H-1B worker or as a way to game the selection
process. The current registration and selection process would benefit
from additional guardrails to better ensure the fair allocation of the
limited H-1B cap numbers to employers and individuals that are
complying with the regulations and have bona fide, legitimate
employment in which they intend to employ qualified beneficiaries.
Accordingly, this rule proposes to further limit the potential for
abuse of the registration process in three ways.\101\
---------------------------------------------------------------------------

\101\ In U.S. Citizenship and Immigration Services Fee Schedule
and Changes to Certain Other Immigration Benefit Request
Requirements, 88 FR 402, 527 (Jan. 4, 2023) (proposed rule), DHS
proposed to increase the H-1B registration fee from $10 to $215 per
registration submitted. While the underlying purpose of the proposed
fee increase is to ensure full cost recovery for USCIS adjudication
and naturalization services, DHS recognizes the possibility that the
increase in the H-1B registration fee may have an impact on the
number of H-1B registrations submitted, including those submitted to
improperly increase the chance of selection. However, any potential
impact of that separate regulatory proposal is purely speculative.
---------------------------------------------------------------------------

First, if USCIS determines that a random selection process should
be conducted, DHS proposes to shift from selecting by registration, to
selecting by unique beneficiary. Under the new proposal, each unique
individual who has a registration submitted on their behalf would be
entered into the selection process once, regardless of the number of
registrations filed on their behalf. By selecting by a unique
beneficiary, DHS would better ensure that each individual has the same
chance of being selected, regardless of how many registrations were
submitted on their behalf.
Second, DHS proposes to extend the existing prohibition on related
entities filing multiple petitions \102\ by also prohibiting related
entities from submitting multiple registrations for the same
individual. Prohibiting related employers from submitting multiple
registrations, absent a legitimate business need, would prevent
employers from submitting registrations when they would not in fact be
eligible to file a petition based on that registration, if selected.
---------------------------------------------------------------------------

\102\ See 8 CFR 214.2(h)(2)(i)(G).
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Third, DHS proposes to codify USCIS's ability to deny an H-1B
petition or revoke an H-1B petition's approval when the petition is
based on a registration where the statement of facts (including the
attestations) was not true and correct, inaccurate, fraudulent, or
misrepresented a material fact.
2. Beneficiary Centric Selection
Under the proposed update to the random selection process,
registrants

[[Page 72898]]

would continue to submit registrations on behalf of beneficiaries and
beneficiaries would continue to be able to have more than one
registration submitted on their behalf, as allowed by applicable
regulations. If a random selection were necessary, then the selection
would be based on each unique beneficiary identified in the
registration pool, rather than each registration. Each unique
beneficiary would be entered in the selection process once, regardless
of how many registrations were submitted on their behalf. If a
beneficiary were selected, each registrant that submitted a
registration on that beneficiary's behalf would be notified of
selection and would be eligible to file a petition on that
beneficiary's behalf. See proposed 8 CFR 214.2(h)(8)(iii)(A)(1) and
(4). Changing how USCIS conducts the selection process to select by
unique beneficiaries instead of registrations would significantly
reduce or eliminate the advantage of submitting multiple registrations
for the same beneficiary solely to increase the chances of selection
and should give all beneficiaries an equal chance at selection. It
could also result in other benefits, such as giving beneficiaries
greater autonomy regarding their H-1B employment and improving the
chances of selection for legitimate registrations.
To ensure that USCIS can accurately identify each potential
beneficiary, registrants will continue to be required to submit
identifying information about the beneficiaries as part of the
registration process. Currently, each registration includes, in
addition to other basic information, fields for the registrant to
provide the beneficiary's full name, date of birth, country of birth,
country of citizenship, gender, and passport number if the beneficiary
has a passport. Although the Registration Final Rule said the passport
number would be required and it is requested during registration,
registrants have been able to effectively bypass the passport
requirement by affirmatively indicating that the beneficiary does not
have a passport.\103\
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\103\ In response to a comment in the final rule, DHS responded,
``This final rule requires that each registration include, in
addition to other basic information, the beneficiary's full name,
date of birth, country of birth, country of citizenship, gender, and
passport number.'' ``Registration Requirement for Petitioners
Seeking To File H-1B Petitions on Behalf of Cap-Subject Aliens,'' 84
FR 888, 900 (Jan. 31, 2019).
---------------------------------------------------------------------------

Because the integrity of the new selection process would rely on
USCIS's ability to accurately identify each individual beneficiary, DHS
proposes to require the submission of valid passport information,
including the passport number, country of issuance, and expiration
date, in addition to the currently required information. See proposed 8
CFR 214.2(h)(8)(iii)(A)(4)(ii). Registrants would no longer be allowed
to select an option indicating that the beneficiary does not have a
passport. Combined with the other collected biographical information,
the passport number would allow USCIS to identify unique individuals
more reliably, increasing the likelihood that each individual would
have the same opportunity to be selected, if random selection were
required. Beneficiaries would be required to supply the same
identifying information and passport information to all registrants
submitting registrations on their behalf. Each beneficiary would only
be able to be registered under one passport, and the registrant would
be required to submit the information from the valid passport that the
beneficiary intends to use for travel to the United States if issued an
H-1B visa. If the beneficiary were already in the United States and
were seeking a COS, the registrant would be required to list a valid
passport. See proposed 8 CFR 214.2(h)(8)(iii)(A)(4)(ii). Even if a
beneficiary had more than one valid passport, such as a beneficiary
with dual citizenship, a beneficiary would only be able to be
registered under one of those passports. If USCIS determined that
registrations were submitted by either the same or different
prospective petitioners for the same beneficiary, but using different
identifying information, USCIS could find all of those registrations
invalid and could deny or revoke the approval of any petition filed
based on those registrations. See proposed 8 CFR
214.2(h)(8)(iii)(A)(2). Petitioners would be given notice and the
opportunity to respond before USCIS denied or revoked the approval of a
petition. Petitioners would be asked to explain and document the
identifying information used in the registration process. Petitioners
would be encouraged to retain documentation provided by the beneficiary
prior to registration, including a copy of the passport.
Any H-1B cap-subject petition must contain and be supported by the
same identifying information about the beneficiary as provided in the
selected registration for the beneficiary named in the petition, and
DHS proposes to require that petitioners submit evidence of the
passport used at the time of registration to identify the beneficiary.
See proposed 8 CFR 214.2(h)(8)(iii)(D)(1). USCIS could deny or revoke
the approval of an H-1B petition that does not meet this proposed
requirement. USCIS would typically afford the petitioner the
opportunity to respond when identifying information provided on the
registration does not match the information provided on the petition,
and petitioners would need to be prepared to explain and document the
reason for any change in identifying information. In its discretion,
USCIS could find that a change in identifying information is
permissible. Such circumstances could include, but would not be limited
to, a legal name change due to marriage, change in gender identity, or
a change in passport number or expiration date due to passport renewal,
or replacement of a stolen passport, in between the time of
registration and filing the petition. See proposed 8 CFR
214.2(h)(8)(iii)(D)(1).
DHS recognizes that some individuals may not possess a valid
passport, and therefore the proposed passport requirement would require
these individuals to obtain a valid passport, at some cost, by the time
of registration or even preclude individuals from being registered if
they were unable to obtain a valid passport by the time of
registration. However, DHS has a strong interest in requiring passport
information for each beneficiary, regardless of nationality, to better
identify unique beneficiaries and enhance the integrity of the H-1B
registration system. Further, DHS believes that requiring passport
information is reasonable because each registration should represent a
legitimate job offer. Except in limited situations where the Department
of State issued a beneficiary a visa on Form DS-232, Unrecognized
Passport or Waiver Cases, in the absence of a passport, it is not clear
how most beneficiaries could enter the United States in H-1B status
pursuant to that job offer. Therefore, the proposed rule, if finalized,
would only accelerate the time by which the beneficiary needed to
obtain a passport if the beneficiary did not already have a passport.
DHS recognizes that stateless individuals may be unable to obtain a
valid passport and that this passport requirement could preclude some
stateless individuals from being registered. DHS considered proposing
an exception to the passport requirement limited solely to stateless
individuals, but providing an exception would leave open the risk of
registrants submitting a registration for an individual claiming to be
stateless and having no passport number and submitting another
registration for the

[[Page 72899]]

same individual while listing a passport number. At the registration
stage, USCIS would not be able to determine whether those two
individuals are the same person or whether the individual is truly
stateless. Such a determination would require an adjudication of the
claim of statelessness, but USCIS does not adjudicate the registration.
Submission of the registration is merely an antecedent procedural
requirement to file the petition properly and is not intended to
replace the petition adjudication process or assess the eligibility of
the beneficiary for the offered position.\104\ DHS also considered the
possibility of generating a unique identifier for stateless
individuals, so that registrants could use this number in place of the
valid passport number on the registration, but believed this option
would run into the same problems of USCIS not being able to verify a
claim of statelessness at the registration stage.
---------------------------------------------------------------------------

\104\ See ``Registration Requirement for Petitioners Seeking To
File H-1B Petitions on Behalf of Cap-Subject Aliens,'' 84 FR 888,
900 (Jan. 31, 2019).
---------------------------------------------------------------------------

Furthermore, DHS considered available data for individuals issued
H-1B visas or otherwise granted H-1B status from FYs 2010-23. While the
data are imperfect, the data nevertheless suggest that the proposed
passport requirement would likely impact a small population of
stateless individuals. For instance, available data for FYs 2022 and
2023 show that USCIS received H-1B petitions for nine and four
individuals, out of a total of 370,110 and 94,649 H-1B petitions,
respectively, whose country of citizenship were listed as
``stateless.'' \105\ This represents just 0.0024 percent and 0.0042
percent, respectively, of all H-1B petitions received those fiscal
years. These data do not show whether the stateless individuals had a
valid passport upon their admission into the United States in H-1B
status; these data also do not show whether any of the four individuals
for FY 2023 were the same as some of the nine individuals reported for
FY 2022. Further, the DOS data show that, between FYs 2010-22, a total
of 89 H-1B visas out of a total of 1,988,856 H-1B visas were issued to
individuals whose nationalities were listed as ``no nationality.''
\106\ This total represents just 0.0045 percent of all H-1B visas
issued during those years. These data do not show how many of the 89
total H-1B visas were issued to unique individuals, as individuals
could have been issued more than one visa during this twelve-year
timeframe. Again, while acknowledging that the above data are
imperfect, DHS recognizes that not providing an exception or
alternative to the passport requirement would potentially impact
stateless individuals who might be approved for H-1B visas but would be
ineligible because they are unable to obtain a passport. DHS continues
to consider options and alternatives to the passport requirement for
stateless individuals and welcomes public comment on this issue as well
as the costs and benefits for both petitioners and beneficiaries of
requiring a passport number at registration.
---------------------------------------------------------------------------

\105\ See USCIS, OP&S Policy Research Division (PRD), I-129--H-
1B Petitions reported with Stateless Country of Citizenship, ELIS
Petitions FYs 2020-23, PRD 252. The reported numbers do not include
beneficiaries whose country of citizenship information was missing,
blank, or unknown. The reported numbers for FY 2020 and FY 2021 were
both zero, as USCIS was not using ELIS at that time.
\106\ DOS, ``Visa Statistics,'' https://travel.state.gov/content/travel/en/legal/visa-law0/visa-statistics.html (last visited
Mar. 16, 2023).
---------------------------------------------------------------------------

As discussed above, conducting the registration selection process
based on unique beneficiaries would significantly reduce or remove the
advantage of submitting multiple registrations solely to increase the
chances of selection and better allow for an equal playing field for
both employers and beneficiaries, while continuing to allow
beneficiaries to have multiple job offers and multiple registrations.
This would significantly reduce or remove an incentive for employers
and individuals to pursue registration without the existence of a bona
fide job offer and an intent to employ the individual for each
registration.
The proposed change would potentially benefit beneficiaries by
giving them greater autonomy to choose the employer for whom they
ultimately work. If multiple unrelated companies submitted
registrations for a beneficiary and the beneficiary were selected, then
the beneficiary could have greater bargaining power or flexibility to
determine which company or companies could submit an H-1B petition for
the beneficiary, because all of the companies that submitted a
registration for that unique beneficiary would be notified that their
registration was selected and they are eligible to file a petition on
behalf of that beneficiary. Under the current selection process,
however, the beneficiary could only be petitioned for by the specific
company that submitted the selected registration. While another company
could subsequently file a petition for concurrent employment, the
beneficiary would still have to be initially employed in H-1B status by
the same company that filed the initial cap-subject petition based on
the selected registration.
The proposed change may also potentially benefit companies that
submit legitimate registrations for unique beneficiaries by increasing
their chances to employ a specific beneficiary in H-1B status. Again,
under the current selection process, a company could file a petition
for and employ a beneficiary in H-1B status only if their registration
for that specific beneficiary was selected. Under the proposed
beneficiary-centric selection process, any company that submitted a
registration for a selected beneficiary could file a petition for and
potentially employ a beneficiary in H-1B status because all of the
prospective petitioners that submitted a registration for that selected
beneficiary would receive a selection notice. As previously discussed,
the data show that the current system may result in an unfair advantage
of selection for registrations potentially involving prospective
petitioners that worked together to submit multiple registrations for
the same beneficiary to unfairly improve their chance of selection. The
beneficiary-centric process is intended to correct this and level the
playing field for companies submitting legitimate registrations for
unique beneficiaries and not attempting to unfairly improve their
chance of selection.
DHS is also proposing minor changes to 8 CFR 214.2(h)(8)(iii)(A)(5)
through (7) and (h)(8)(iii)(E) to conform the regulatory text to the
proposed new selection process and clarify that USCIS would select
``beneficiaries'' rather than ``registrations.''
DHS expects USCIS to have sufficient time to develop, thoroughly
test, and implement the modifications to the registration system and
selection process and give stakeholders sufficient time to adjust to
these new procedures by the time the rule finalizing this proposed rule
would publish and become effective. USCIS has already begun planning
the development work of the new selection process in the electronic H-
1B registration tool. As indicated before, DHS may move to finalize
certain provisions through one or more final rules after carefully
considering all public comments and may possibly do so in time for the
FY 2025 cap season, depending on agency resources. In particular, DHS
may seek to finalize the provisions relating to the beneficiary centric
registration selection process in proposed 8 CFR 214.2(h)(8)(iii)(A)(4)
before moving to finalize the other proposed provisions in a separate
rule.
However, DHS and USCIS cannot predict, with certainty, agency
resources for the next few years or even when the

[[Page 72900]]

final rule would publish. Therefore, there is also the possibility that
DHS would need to delay the effective date of 8 CFR
214.2(h)(8)(iii)(A)(4). This delayed effective date might only apply to
the proposed changes describing the beneficiary-centric selection
process and, in that case, would not impact any other provisions in
this proposed rule, if finalized.
DHS may need to delay the effective date if it determines that
USCIS does not have sufficient time to ensure proper functionality of
the beneficiary-centric selection process, including completing all
requisite user testing. DHS may need to delay the effective date for
other reasons as well, such as to avoid the confusion that could result
if the final rule took effect too close to the start of the initial
registration period for the upcoming cap season, or to avoid disparate
treatment of registrations if the final rule took effect in the middle
of the initial registration period, or during a subsequent registration
and selection period, particularly if USCIS needed to open a subsequent
registration period later that year. In the event DHS needed to further
delay the effective date of these provisions beyond the effective date
of the final rule, DHS would publish a Federal Register Notice advising
the regulated public of the new delayed effective date. That Federal
Register Notice would be published at least 30 calendar days in advance
of the first date of the initial registration period.
3. Bar on Multiple Registrations Submitted by Related Entities
DHS regulations already preclude the filing of multiple H-1B cap-
subject petitions by related entities for the same beneficiary, unless
the related petitioners can establish a legitimate business need for
filing multiple cap-subject petitions for the same beneficiary. See 8
CFR 214.2(h)(2)(i)(G). DHS is not proposing to change that, but,
rather, is proposing to extend a similar limitation to the submission
of registrations. See proposed 8 CFR 214.2(h)(2)(i)(G). When an
employer submits a registration, they attest on the H-1B Registration
Tool that they intend to file a petition based on that registration. If
two related employers submit registrations for a cap-subject petition
for the same beneficiary, without a legitimate business need, both
employers are attesting to their intent to file a petition for that
beneficiary. If they are both selected, and they lack a legitimate
business need, they are left with one of two choices: (1) both file
petitions in violation of 8 CFR 214.2(h)(2)(i)(G); or (2) do not file
and potentially violate the attestation made at the time of
registration. Therefore, employers are left with two bad options. To
allow related employers to submit registrations, but not allow them to
file petitions, creates an inconsistency between the antecedent
procedural step of registration and the petition filing. Extending the
bar on multiple petition filings by related entities to multiple
registration submissions by related entities for the same cap-subject
beneficiary would harmonize the expectations for petition filing and
registration submission.
While DHS anticipates that changing the way beneficiaries are
selected would reduce frivolous registrations and their negative
effects, DHS cannot guarantee with certainty that this change would
completely eliminate entities from working with each other to submit
registrations to unfairly increase chances of selection for a
beneficiary by submitting slightly different identifying information or
other means that DHS cannot anticipate. Therefore, adding this
provision would serve as an additional tool available to DHS to
militate against such abuse and bolster the integrity of the
registration process. Furthermore, proposed 8 CFR 214.2(h)(2)(i)(G) is
necessary because of the possibility that registration could be
suspended, or that the implementation of the beneficiary-centric
selection process could be delayed. If registration were suspended, the
bar on multiple petitions would still be relevant, and if
implementation of the beneficiary-centric selection process were
delayed, the bar on multiple registrations would still be relevant.
4. Registrations With False Information or That Are Otherwise Invalid
Although registration is an antecedent procedural step undertaken
prior to filing an H-1B cap-subject petition, the validity of the
registration information is key to the registrant's eligibility to file
a petition. The information contained in the registration, including
the required attestations, must be valid. Currently, the regulations
state that it is grounds for denial or revocation if the statements of
facts contained in the petition are not true and correct, inaccurate,
fraudulent, or misrepresented a material fact.\107\ In this rule, DHS
proposes to codify that those requirements extend to the information
provided in the registration and to make clear that this includes if
attestations on the registration are determined to be false. See
proposed 8 CFR 214.2(h)(10)(ii) and (iii) and (h)(11)(iii)(A)(2).
---------------------------------------------------------------------------

\107\ See 8 CFR 214.2(h)(10)(ii) and (h)(11)(iii)(A)(2).
---------------------------------------------------------------------------

To allow companies to provide false information on the registration
without consequence would allow them to potentially take a cap number
for which they are ineligible. As such, DHS proposes codifying that
providing untrue, incorrect, inaccurate, or fraudulent statements of
fact, or misrepresenting material facts, including providing false
attestations on the registration, would be grounds for denial or
revocation of the petition that was based on that registration.
DHS is also proposing changes to the regulations governing
registration that would provide USCIS with clearer authority to deny or
revoke the approval of a petition based on a registration that was not
properly submitted or was otherwise invalid. Specifically, DHS is
proposing to add that if a petitioner submits more than one
registration per beneficiary in the same fiscal year, all registrations
submitted by that petitioner relating to that beneficiary for that
fiscal year may be considered not only invalid, but that ``USCIS may
deny or revoke the approval of any petition filed for the beneficiary
based on those registrations.'' See proposed 8 CFR
214.2(h)(8)(iii)(A)(2).
Additionally, DHS is proposing to add that USCIS may deny or revoke
the approval of an H-1B petition if it determines that the fee
associated with the registration is declined, not reconciled, disputed,
or otherwise invalid after submission. See proposed 8 CFR
214.2(h)(8)(iii)(D)(2). DHS is also proposing a new provision that adds
an invalid registration as a ground for revocation. See proposed 8 CFR
214.2(h)(11)(iii)(A)(6). Through these provisions, DHS aims to bolster
the integrity of the registration system.
5. Alternatives Considered
DHS considered the alternative of eliminating the registration
system and reverting to the paper-based filing system stakeholders used
prior to implementing registration. However, when DHS considered the
immense cost savings that registration provides to both USCIS and
stakeholders and the significant resources the agency would incur to
revert back to a paper-based filing system for all cap-subject cases,
the benefits of having a registration system still outweigh the costs
and any potential problems caused by frivolous filings. As a result,
DHS is proposing to make changes to the registration system to improve
it and militate against the potential for frivolous filings. DHS
continues to consider options to

[[Page 72901]]

improve the registration system and welcomes public comment on this
issue.
6. Provisions To Ensure Bona Fide Job Offer for a Specialty Occupation
Position
a. Contracts
Under proposed 8 CFR 214.2(h)(4)(iv)(C), DHS proposes to codify
USCIS' authority to request contracts, work orders, or similar
evidence, in accordance with 8 CFR 103.2(b) (USCIS may request
additional evidence if the evidence submitted does not establish
eligibility) and 8 CFR 214.2(h)(9) (``USCIS will consider all the
evidence submitted and any other evidence independently required to
assist in adjudication.''). Such evidence may take the form of
contracts or legal agreements, if available, or other evidence
including technical documentation, milestone tables, or statements of
work. Evidence submitted should show the contractual relationship
between all parties, the terms and conditions of the beneficiary's
work, and the minimum educational requirements to perform the duties.
Uncorroborated statements about a claimed in-house project for a
company with no history of developing projects in-house, standing
alone, would generally be insufficient to establish that the claimed
in-house work exists.
The submitted contracts should include both the master services
agreement and accompanying statement(s) of work (or similar legally
binding agreements under different titles) signed by an authorized
official of any party in the contractual chain, including the
petitioner, the end-client company for which the beneficiary will
perform work, and any intermediary or vendor company. In general, the
master services agreement (also commonly called a supplier agreement)
sets out the essential contractual terms and provides the basic
framework for the overall relationship between the parties.\108\ The
statement of work (also commonly called a work order) provides more
specific information, such as the scope of services to be performed,
details about the services, and the allocation of responsibilities
among the parties.\109\ The petitioner may also submit letters signed
by an authorized official of the end-client company for which the
beneficiary will work and any intermediary or vendor company.
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\108\ See 3 David M. Adlerstein et at., Successful Partnering
Between Inside and Outside Counsel sec. 49:35.
\109\ See 3 David M. Adlerstein et at., Successful Partnering
Between Inside and Outside Counsel sec. 49:37.
---------------------------------------------------------------------------

Other types of documentation petitioners may provide include
technical documentation, milestone tables, marketing analyses, cost-
benefit analyses, brochures, and funding documents. Overall, these
documents should be detailed enough to provide a sufficiently
comprehensive view of the position being offered to the beneficiary and
the terms and conditions under which the work would be performed. The
documentation should also include the minimum educational requirements
to perform the duties. Documentation that merely sets forth the general
obligations of the parties to the agreement, or that does not provide
specific information pertaining to the actual work to be performed,
would generally be insufficient.\110\
---------------------------------------------------------------------------

\110\ When requested evidence may contain trade secrets, for
example, the petitioner may redact or sanitize the relevant sections
to provide a document that is still sufficiently detailed and
comprehensive, yet does not reveal sensitive commercial information.
However, it is critical that the unredacted information contain all
information necessary for USCIS to adjudicate the petition. Although
a petitioner may always refuse to submit confidential commercial
information, if it is deemed too sensitive, the petitioner must also
satisfy the burden of proof and runs the risk of denial. Cf. Matter
of Marques, 16 I&N Dec. 314, 316 (BIA 1977) (in refusing to disclose
material and relevant information that is within his knowledge, the
respondent runs the risk that he may fail to carry his burden of
persuasion with respect to his application for relief).
---------------------------------------------------------------------------

Through proposed 8 CFR 214.2(h)(4)(iv)(C), DHS seeks to put
stakeholders on notice of the kinds of evidence that could be requested
to establish the terms and conditions of the beneficiary's work and the
minimum educational requirements to perform the duties. This evidence,
in turn, could establish that the petitioner has a bona fide job offer
for a specialty occupation position for the beneficiary. DHS is
proposing conforming changes to the introductory paragraph (h)(4)(iv)
to distinguish the types of evidence that are required as initial
evidence addressed in paragraphs (h)(4)(iv)(A) and (B), from the
evidence USCIS may request under new paragraph (h)(4)(iv)(C).
b. Non-Speculative Employment
DHS proposes to codify its requirement that the petitioner must
establish, at the time of filing, that it has a non-speculative
position in a specialty occupation available for the beneficiary as of
the start date of the validity period as requested on the petition. See
proposed 8 CFR 214.2(h)(4)(iii)(F). This change is consistent with
current DHS policy guidance that an H-1B petitioner must establish that
employment exists at the time of filing the petition and that it will
employ the beneficiary in a specialty occupation.\111\
---------------------------------------------------------------------------

\111\ See USCIS, ``Rescission of Policy Memoranda,'' PM-602-0114
(June 17, 2020) (citing Matter of Chawathe, 25 I&N Dec. 369 (AAO
2010)).
---------------------------------------------------------------------------

The requirement of non-speculative employment derives from the
statutory definition of an H-1B nonimmigrant worker as someone who is
``coming temporarily to the United States to perform services . . . in
a specialty occupation . . . .'' See INA section 101(a)(15)(H)(i)(b), 8
U.S.C. 1101(a)(15)(H)(i)(b). To determine whether the H-1B worker will
perform services in a specialty occupation as required, USCIS must
examine the nature of the services the beneficiary will perform in the
offered position. Where the proposed position is speculative, meaning
that it is undetermined, then the petitioner will not be able to
establish the nature of the offered position. Speculative employment
precludes the agency from ascertaining whether those duties normally
require the attainment of a U.S. bachelor's or higher degree in a
directly related specific specialty to qualify the position as a
specialty occupation, and whether the beneficiary has the appropriate
qualifications to perform those duties. Speculative employment
undermines the integrity and a key goal of the H-1B program, which is
to help U.S. employers obtain the skilled workers they need to conduct
their business, subject to annual numerical limitations, while
protecting the wages and working conditions of U.S. workers. DHS
believes that expressly prohibiting speculative employment, consistent
with current practice, would align with Congressional intent and would
prevent possible misunderstanding of the specialty occupation
eligibility requirement.
The agency has long held and communicated the view that speculative
employment is not permitted in the H-1B program. For example, a 1998
proposed rule documented this position, stating that, historically,
USCIS (or the Service, as it was called at the time) has not granted H-
1B classification on the basis of speculative, or undetermined,
prospective employment.\112\ That proposed rule explained that the H-1B
classification was not intended as a vehicle for a person to engage in
a job search within the United States, or for

[[Page 72902]]

employers to bring in temporary foreign workers to meet possible
workforce needs arising from potential business expansions or the
expectation of potential new customers or contracts.\113\ If the
employment is speculative, USCIS is unable to properly analyze the
intended employment and determine whether the position is a specialty
occupation.\114\
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\112\ See ``Petitioning Requirements for the H Nonimmigrant
Classification,'' 63 FR 30419, 30419-30420 (June 4, 1998) (proposed
rule to be codified at 8 CFR part 214).
\113\ See id. at 30420.
\114\ See id. See also Government Accountability Office, ``H-1B
Foreign Workers: Better Controls Needed to Help Employers and
Protect Workers,'' GAO/HEHS-00-157 (Sept. 2000), https://www.gao.gov/assets/hehs-00-157.pdf (``The petition is required to
contain the necessary information to show that a bona fide job
exists . . . .''); Serenity Info Tech, Inc. v. Cuccinelli, 461 F.
Supp. 3d 1271, 1286 (N.D. Ga. 2020) (``Demonstrating that the
purported employment is actually likely to exist for the beneficiary
is a basic application requirement . . . .'').
---------------------------------------------------------------------------

Note, however, that establishing non-speculative employment does
not mean demonstrating non-speculative daily work assignments through
the duration of the requested validity period. DHS does not propose to
require employers to establish non-speculative and specific assignments
for every day of the intended period of employment.\115\ Again, under
proposed 8 CFR 214.2(h)(4)(iii)(F), a petitioner must demonstrate, at
the time of filing, availability of non-speculative employment as of
the requested start date. However, DHS does not require a petitioner to
identify and document the beneficiary's specific day-to-day
assignments.\116\ DHS also does not intend to limit validity periods
based on the end-date of contracts, work orders, itineraries, or
similar documentation. Speculative employment should not be confused
with employment that is contingent on petition approval, visa issuance
(when applicable), or the grant of H-1B status. DHS recognizes that
employment may be actual, but contingent on petition approval, visa
issuance, or the beneficiary being granted H-1B status.
---------------------------------------------------------------------------

\115\ See ITServe Alliance, Inc. v. Cissna, 443 F. Supp. 3d 14,
39 (D.D.C. 2020) (the U.S. District Court for the District of
Columbia, in considering a requirement that an H-1B petitioner
establish non-speculative assignments for the entire time requested
in a petition, explained that ``very few, if any, U.S. employer
would be able to identify and prove daily assignments for the future
three years for professionals in specialty occupations'' and that
``[n]othing in [the statutory definition of `specialty occupation']
requires specific and non-speculative qualifying day-to-day
assignments for the entire time requested in the petition'');
Serenity Info Tech, 461 F. Supp. 3d at 1286 (agreeing with the
determination by the court in ITServe Alliance that the statute does
not require specific and non-speculative qualifying day-to-day
assignments).
\116\ USCIS, ``Rescission of Policy Memoranda,'' PM-602-0114 at
3 (June 17, 2020) (stating that ``a petitioner is not required to
identify and document the beneficiary's specific day-to-day
assignments'').
---------------------------------------------------------------------------

c. LCA Corresponds With the Petition
DHS is proposing to update the regulations to expressly include
DHS's existing authority to ensure that the LCA properly supports and
corresponds with the accompanying H-1B petition. The proposed text at 8
CFR 214.2(h)(4)(i)(B)(1)(ii) would align DHS regulations with existing
DOL regulations, which state that DHS has the authority to determine
whether the LCA supports and corresponds with the H-1B petition. See 20
CFR 655.705(b). It would also codify DHS's authority to determine
whether all other eligibility requirements have been met, such as
whether the beneficiary for whom H-1B classification is sought
qualifies to perform services in the specialty occupation as prescribed
in INA section 214(i)(2), 8 U.S.C. 1184(i)(2). While DHS already has
the authority under INA sections 101(a)(15)(H)(i)(b), 103(a), and
214(a)(1) and (c)(1), 8 U.S.C. 1101(a)(15)(H)(i)(b), 1103(a), and
1184(a)(1) and (c)(1), to determine whether the LCA supports and
corresponds with the H-1B petition, this authority currently is only
stated in DOL's regulations and not in DHS's regulations.\117\ By
adding it to DHS regulations, DHS would align its regulations with
existing DOL regulations, which would add clarity and provide
transparency to stakeholders.
---------------------------------------------------------------------------

\117\ See 20 CFR 655.705(b).
---------------------------------------------------------------------------

The current statute and regulations require that a petitioner file
an LCA certified by the Secretary of Labor with its H-1B petition,
unless filing for certain Department of Defense workers.\118\ Among
other information, the employer must provide the prevailing wage rate,
occupational classification (``Standard Occupational Classification
(SOC) occupational title''),\119\ and place of employment for the
offered position on the LCA. The employer must attest on the LCA that
it will pay the beneficiary the higher of the prevailing wage for the
occupational classification in the area of employment or the employer's
actual wage.\120\ It must also attest to the truthfulness and accuracy
of the information provided on the LCA.\121\
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\118\ See INA section 212(n)(1); 8 CFR 214.2(h)(1)(ii)(B)(1);
(h)(4)(i)(B)(1) and (2); (h)(4)(iii)(B).
\119\ SOC refers to the Standard Occupational Classification
code system, a classification system used by the DOL and other
Federal agencies to categorize occupations. See BLS, ``Standard
Occupational Classification,'' https://www.bls.gov/soc/ (last
visited Oct. 26, 2022); OMB, ``Statistical Programs & Standards,''
https://www.whitehouse.gov/omb/information-regulatory-affairs/statistical-programs-standards/ (last visited Oct. 26, 2022).
\120\ See 20 CFR 655.730-655.731.
\121\ See id.
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DHS proposes to amend existing regulations to state clearly that,
although the Secretary of Labor certifies the LCA, DHS has the
authority and obligation to determine whether the certified LCA
properly supports and corresponds with the H-1B petition.\122\ DHS also
proposes to amend the regulations to clarify its existing authority and
obligation to determine whether all eligibility requirements for H-1B
classification have been met.\123\
---------------------------------------------------------------------------

\122\ There are four Federal agencies involved in the process
relating to H-1B nonimmigrant classification and employment: DOL,
DOS, U.S. Department of Justice, and DHS. In general, DOL
administers the LCA process and LCA enforcement provisions. As
noted, DHS determines, among other things, whether the petition is
properly supported by an LCA that corresponds with the petition,
whether the occupation named in the LCA is a specialty occupation,
and whether the qualifications of the nonimmigrant meets the
statutory and regulatory requirements for H-1B visa classification.
Department of Justice administers the enforcement and disposition of
complaints regarding an H-1B-dependent or willful violator
employer's failure to offer an H-1B position to an equally or better
qualified U.S. worker, or such employer's willful misrepresentation
of material facts relating to this obligation. DOS, through U.S.
Embassies and consulates, is responsible for issuing H-1B visas. See
20 CFR 655.705.
\123\ See, e.g., 8 U.S.C. 1184(c)(1) (stating ``[t]he question
of importing any alien as a nonimmigrant under subparagraph (H) . .
. in any specific case or specific cases shall be determined by the
[Secretary of Homeland Security]'').
---------------------------------------------------------------------------

This proposed regulation would more clearly summarize DHS's
existing authority under INA section 101(a)(15)(H)(i)(b), 103(a), and
214(a)(1) and (c)(1), 8 U.S.C. 1101(a)(15)(H)(i)(b), 1103(a), and
1184(a)(1) and (c)(1). This authority is also referenced, in part, in
DOL's regulation at 20 CFR 655.705(b), which states in pertinent part
that DHS accepts an employer's H-1B petition with the DOL-certified LCA
attached, and in doing so, ``DHS determines whether the petition is
supported by an LCA which corresponds with the petition'' and otherwise
meets the statutory requirements for the classification.\124\ Thus,
DHS's proposed regulation would mirror DOL regulations and expressly
clarify DHS's existing authority with respect to reviewing the
certified LCA within the context of adjudicating the H-1B petition.
---------------------------------------------------------------------------

\124\ See Matter of Simeio Solutions, LLC, 26 I&N Dec. 542, 546
n.6 (AAO 2015) (``USCIS must determine whether the attestations and
content of an LCA correspond to and support the H-1B visa
petition'').
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When determining whether the submitted certified LCA properly

[[Page 72903]]

corresponds with the petition, consistent with current practice, USCIS
would consider all the information on the LCA, including, but not
limited to, the standard occupational classification (SOC) code, wage
level (or an independent authoritative source equivalent), and
location(s) of employment. USCIS would evaluate whether that
information sufficiently aligns with the offered position, as described
in the rest of the record of proceeding. In other words, USCIS would
compare the information contained in the LCA against the information
contained in the petition and supporting evidence. USCIS would not,
however, supplant DOL's responsibility with respect to wage
determinations. The wage level is not solely determinative of whether
the position is a specialty occupation.
DHS notes that the LCA, H-1B petition, and supporting documentation
must be for the same position; however, the same position does not
necessarily mean that all information describing the position must be
identical. A petitioner may legitimately supplement or clarify the
record with additional information about the offered position in
response to an RFE, on motion, or on appeal. So long as the
supplemental information does not materially change the position
described in the original H-1B petition, DHS would consider the
position to be the same. DHS would view a change to be material for
these purposes if the change would have required the petitioner to file
an amended or new petition with the corresponding LCA or if the change
was made to make the position description comport with an originally
submitted LCA.\125\
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\125\ See 8 CFR 103.2(b)(1) (an applicant or petitioner must
establish eligibility at the time of filing); 8 CFR
214.2(h)(2)(i)(E) (petitioner must file a new or amended petition
with USCIS to reflect any material change in the terms and
conditions of employment or the foreign citizen's eligibility for H-
1B status); Matter of Simeio Solutions, LLC, 26 I&N Dec. 542, 547
(AAO 2015) (``When there is a material change in the terms and
conditions of employment, the petitioner must file an amended or new
H-1B petition with the corresponding LCA. 8 CFR
214.2(h)(2)(i)(E).''). See also Matter of Izummi, 22 I&N Dec. 169,
176 (Assoc. Comm'r 1998) (a petitioner may not make material changes
to a petition in an effort to make a deficient petition conform to
USCIS requirements).
---------------------------------------------------------------------------

Additionally, DHS proposes to improve 8 CFR 214.2(h)(4)(i)(B), by
redesignating existing paragraphs (h)(4)(i)(B)(1) through (6) as
proposed paragraphs (h)(4)(i)(B)(1)(i) through (vi) and adding a new
heading to clarify that these provisions all relate to LCA
requirements. DHS is also proposing technical changes throughout this
section, such as replacing ``shall'' with ``must,'' ``application''
with ``certified labor condition application,'' and ``the Service''
with ``USCIS,'' for additional clarity.
In separate provisions that are also related to the LCA, DHS
proposes to revise the grounds for denial or revocation related to the
statements of facts contained in the petition, TLC, or the LCA. See
proposed 8 CFR 214.2(h)(10)(ii) and (h)(11)(iii)(A)(2). This would
codify DHS's current practices, as the LCA is incorporated into and
considered part of the H-1B petition, just like the TLC is incorporated
into and considered part of the H-2A or H-2B petition.\126\
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\126\ See 8 CFR 103.2(b)(1) (any evidence submitted in
connection with a benefit request is incorporated into and
considered part of the request); USCIS, ``Rescission of Policy
Memoranda,'' PM-602-0114, at 2 (June 17, 2020) (``The petitioner is
required to attest under penalty of perjury on the H-1B petition and
LCA that all of the information contained in the petition and
supporting documents is complete, true, and correct.''), https://www.uscis.gov/sites/default/files/document/memos/PM-602-0114_ITServeMemo.pdf; Matter of Simeio Solutions, 26 I&N Dec. 542,
546 n.6 (AAO 2015) (``USCIS must determine whether the attestations
and content of an LCA correspond to and support the H-1B visa
petition, including the specific place of employment. 20 CFR
655.705(b) (2014); see also 8 CFR 214.2(h)(4)(i)(B).'').
---------------------------------------------------------------------------

While current 8 CFR 214.2(h)(11)(iii)(A)(2) already refers to the
``temporary labor certification,'' it does not expressly refer to the
``labor condition application.'' DHS proposes to add an express
reference to the LCA in proposed 8 CFR 214.2(h)(11)(iii)(A)(2) to
resolve any doubts that a false statement on the LCA--just like a false
statement on the TLC--could provide a basis for USCIS to revoke an H
petition approval. The purpose of the proposed change to 8 CFR
214.2(h)(10)(ii) is to clarify and better align with the language in
proposed 8 CFR 214.2(h)(11)(iii)(A)(2) to expressly reference
inaccurate or false statements on the petition, TLC, or LCA, as
applicable, as a basis for denial of an H petition.
d. Revising the Definition of U.S. Employer
DHS is proposing to revise the definition of ``United States
employer.'' Currently, 8 CFR 214.2(h)(4)(ii) defines the term ``United
States employer'' as a person, firm, corporation, contractor, or other
association, or organization in the United States that: (1) Engages a
person to work within the United States; (2) has an employer-employee
relationship with respect to employees under 8 CFR part 214, as
indicated by the fact that it may hire, pay, fire, supervise, or
otherwise control the work of any such employee; and (3) has an
Internal Revenue Service Tax identification number.
DHS proposes several changes to the ``United States employer''
definition at 8 CFR 214.2(h)(4)(ii) to bring it in line with our
current practice. First, in place of the employer-employee relationship
requirement, DHS proposes to codify the existing requirement that the
petitioner has a bona fide job offer for the beneficiary to work within
the United States. DHS also proposes to replace the requirement that
the petitioner ``[e]ngages a person to work within the United States''
with the requirement that the petitioner have a legal presence and is
amenable to service of process in the United States. DHS is not
proposing to change the current requirement at 8 CFR 214.2(h)(4)(ii)
that the petitioner must have an IRS Tax identification number.
e. Employer-Employee Relationship
DHS proposes to remove from the definition of U.S. employer the
reference to an employer-employee relationship, which, in the past, was
interpreted using common law principles and was a significant barrier
to the H-1B program for certain petitioners, including beneficiary-
owned petitioners. This proposed change is consistent with current
USCIS policy guidance, and removing the employer-employee relationship
language from the regulations would promote clarity and transparency in
the regulations. It would also support DHS's overall commitment to
reducing administrative barriers, including those that unnecessarily
impede access to USCIS immigration benefits.\127\ This proposed change
reflects USCIS's current practices since June 2020, when, following a
court order and settlement agreement,\128\ USCIS formally rescinded its
January 2010 policy guidance on the employer-employee relationship
analysis under common law.\129\ As

[[Page 72904]]

explained in USCIS's June 2020 policy memorandum ``Rescission of Policy
Memoranda,'' when assessing whether an employer and a beneficiary have
an employer-employee relationship under current 8 CFR 214.2(h)(4)(ii),
the petitioner need only establish that it meets at least one of the
``hire, pay, fire, supervise, or otherwise control the work of''
factors with respect to the beneficiary.\130\ H-1B petitioners are
required to submit an LCA attesting that they will pay the beneficiary,
see, e.g., 8 CFR 214.2(h)(4)(i)(B), as well as a copy of any written
contracts between the petitioner and the beneficiary (or a summary of
the terms of the oral agreement under which the beneficiary will be
employed, if a written contract does not exist), which typically
demonstrates that they will hire and pay the beneficiary, see 8 CFR
214.2(h)(4)(iv). Therefore, H-1B petitioners generally will meet the
employer-employee relationship under current 8 CFR 214.2(h)(4)(ii)
simply by submitting the required LCA and employment agreement as part
of the initial evidence for Form I-129. As a result, the current
employer-employee relationship requirement has limited practical value
and could be a potential source of confusion if maintained in the
regulations. As an additional integrity measure, and as explained in
more detail below, DHS is proposing to codify the existing requirement
that the petitioner have a bona fide job offer for the beneficiary to
work within the United States.
---------------------------------------------------------------------------

\127\ See, e.g., ``Identifying Barriers Across U.S. Citizenship
and Immigration Services (USCIS) Benefits and Services; Request for
Public Input,'' 86 FR 20398 (Apr. 19, 2021).
\128\ See ITServe Alliance, Inc. v. Cissna, 443 F.Supp.3d 14, 19
(D.D.C. 2020) (finding that the USCIS policy interpreting the
existing regulation to require a common-law employer-employee
relationship violated the Administrative Procedure Act as applied
and that the itinerary requirement at 8 CFR 214.2(h)(2)(i)(B) is
ultra vires as it pertains to H-1B petitions).
\129\ See USCIS, ``Rescission of Policy Memoranda,'' PM-602-0114
(June 17, 2020), https://www.uscis.gov/sites/default/files/document/memos/PM-602-0114_ITServeMemo.pdf. This memorandum rescinded the
USCIS policy memorandum ``Determining Employer-Employee Relationship
for Adjudication of H-1B Petitions, Including Third-Party Site
Placements,'' HQ 70/6.2.8 (AD 10-24) (Jan. 8, 2010).
\130\ Id. at 2.
---------------------------------------------------------------------------

As indicated above, the previous analysis created significant
barriers to the H-1B program for certain petitioners, including
beneficiary-owned petitioners. For example, a beneficiary-owner may
have been unlikely to establish a common-law employer-employee
relationship with the petitioning entity, even if working for the
petitioning entity in a specialty occupation and as a W-2 employee, and
thus denied classification as an H-1B specialty occupation worker.
Furthermore, USCIS's previous policy was not entirely consistent with
DOL's regulatory definition of an H-1B employer. DOL's definition of
``employer'' at 20 CFR 655.715 states, in pertinent part, ``In the case
of an H-1B nonimmigrant (not including E-3 and H-1B1 nonimmigrants),
the person, firm, contractor, or other association or organization in
the United States that files a petition with [USCIS] on behalf of the
nonimmigrant is deemed to be the employer of that nonimmigrant.'' The
definition further states, ``In the case of an E-3 and H-1B1
nonimmigrant, the person, firm, contractor, or other association or
organization in the United States that files an LCA with [DOL] on
behalf of the nonimmigrant is deemed to be the employer of that
nonimmigrant.'' As a result of USCIS's 2010 policy guidance, it was
often the case that USCIS concluded a petitioner was not an employer
for purposes of the H-1B petition even though DOL deemed that same
petitioner to be an employer for purposes of the LCA. This disparity
increased the potential for confusion among H-1B stakeholders. It is in
DHS's interests to promote, to the extent possible, a more consistent
framework among DHS and DOL regulations for H-1B, E-3, and H-1B1
petitions and to increase clarity for stakeholders. However, the
proposed removal of the employer-employee requirement from 8 CFR
214.2(h)(4)(ii) is not intended to narrow in any way the scope of
petitioners against whom DOL may enforce the H-1B labor requirements.
f. Bona Fide Job Offer
Under the second prong of the definition of ``U.S. employer'' at 8
CFR 214.2(h)(4)(ii), DHS proposes to codify the existing requirement
that the petitioner have a bona fide job offer for the beneficiary to
work within the United States.\131\ While this requirement is not
currently expressly stated in the regulations, it is reflected in
current USCIS policy guidance, which states that the petitioner must
establish that ``[a] bona fide job offer . . . exist[s] at the time of
filing.'' \132\
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\131\ Consistent with existing practice, the phrase ``within the
United States'' does not and would not prohibit H-1B nonimmigrants
from travelling internationally.
\132\ See USCIS, ``Rescission of Policy Memoranda,'' PM-602-0114
(June 17, 2020); see also USCIS, Adjudicator's Field Manual (AFM)
Chapter 31.3(g)(4) at 24, ``H1-B Classification and Documentary
Requirements has been partially superseded as of June 17, 2020,''
available at https://www.uscis.gov/sites/default/files/document/policy-manual-afm/afm31-external.pdf (last visited Sept. 5, 2023)
(``The burden of proof falls on the petitioner to demonstrate the
need for such an employee. Unless you are satisfied that a
legitimate need exists, such a petition may be denied because the
petitioner has failed to demonstrate that the beneficiary will be
employed in a qualifying specialty occupation.''). While USCIS
retired the AFM in May 2020, this example nevertheless illustrates
the agency's historical interpretation.
---------------------------------------------------------------------------

This proposed change would also be consistent with the current H-1B
Registration Tool, where the petitioner must attest at the time of
registration that each registration for an H-1B cap-subject beneficiary
reflects a legitimate job offer. DHS's proposal to codify the
requirement for a bona fide job offer requirement would complement
DHS's proposal to codify the requirement to demonstrate a non-
speculative position in a specialty occupation for the beneficiary at
proposed 8 CFR 214.2(h)(4)(iii)(F).
DHS proposes to codify the bona fide job offer requirement in place
of the current requirement that the petitioner ``[e]ngages a person to
work within the United States'' under the first prong of current 8 CFR
214.2(h)(4)(ii). As currently written, the requirement for a petitioner
to ``engage[ ] a person to work within the United States'' has limited
practical value because it does not specify that the petitioner should
engage the beneficiary (rather than ``a person'') and it does not
specify that the work to be performed must be within the United States.
Furthermore, DHS proposes to add clarification that the bona fide
job offer may include ``telework, remote work, or other off-site work
within the United States.'' See proposed 8 CFR 214.2(h)(4)(ii). While
USCIS currently allows these types of work arrangements (provided they
are consistent with the certified LCA and other regulatory
requirements), the regulations do not state this expressly. DHS
believes this clarification is helpful as more businesses allow and
more workers choose telework, remote work, or other types of work
arrangements.\133\ DHS emphasizes that nothing in the proposed rule
would change the Department of Labor's administration and enforcement
of statutory and regulatory requirements related to labor condition
applications. See 8 U.S.C. 1182(n); 20 CFR part 655 Subparts H and I.
These requirements would be unaffected by this proposed rule and would
continue to apply to all H-1B employers.
---------------------------------------------------------------------------

\133\ See, e.g., Kim Parker, Juliana Menasce Horowitz, and
Rachel Minkin, ``COVID-19 Pandemic Continues to Reshape Work in
America'' (Feb. 16, 2022), https://www.pewresearch.org/social-trends/2022/02/16/covid-19-pandemic-continues-to-reshape-work-in-america/ (among those who have a workplace outside of their home, in
January 2022, 61 percent said they choose not to go into their
workplace, compared to only 31 percent of this population surveyed
in October 2020); Greg Iacurci, ``Why Labor Economists Say the
Remote Work `Revolution' is Here to Stay'' (Dec. 1, 2022), https://www.cnbc.com/2022/12/01/why-labor-economists-say-the-remote-work-revolution-is-here-to-stay.html (the share of remote workers had
been doubling every 15 years prior to 2020, but the subsequent
increase during the pandemic amounted to 30 years of pre-pandemic
growth).
---------------------------------------------------------------------------

g. Legal Presence and Amenable to Service of Process
In the second prong of the definition of U.S. employer at 8 CFR
214.2(h)(4)(iv)(D), DHS proposes to add a new requirement that the
petitioner has a legal presence in the United States

[[Page 72905]]

and is amenable to service of process in the United States. Legal
presence, in this context, means that the petitioner is legally formed
and authorized to conduct business in the United States. In order to
employ an individual legitimately in a specialty occupation, an
employer should be able to conduct business legally in the United
States.\134\ If USCIS discovers at any time while the petition is
pending that the petitioner does not have a legal presence in the
United States, it may issue a request for additional evidence and
provide the petitioner the opportunity to cure that deficiency.
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\134\ See, e.g., In Re. 9019481, 2020 WL 9668720 (AAO July 17,
2020) (``[T]he record of proceeding does not contain evidence
demonstrating the Petitioner is active and in good standing with any
State. If a petitioner is no longer in business, then no bona fide
job offer exists to support the petition.''); In Re. 16130730, 2021
WL 2806409 (AAO Apr. 27, 2021) (``[T]he petitioner has not
demonstrated that it is an entity in active and good standing. . . .
If the petitioner is not actually in business, it cannot qualify as
an entity with standing to file an H-1B petition.'').
---------------------------------------------------------------------------

``Amenable to service of process'' means that the petitioner may be
sued in a court in the United States. Since the petitioner undertakes
legal obligations to employ the beneficiary according to the terms and
conditions on the petition and LCA, the petitioner should not be able
to avoid liability for not complying with these obligations by later
claiming that it is not the employer or is not amenable to service of
process. The requirement that the petitioner is amenable to service of
process in the United States is also found in other classifications,
such as H-2B, O-1, and P-1. Those regulations state that ``a foreign
employer is any employer who is not amenable to service of process in
the United States.'' See 8 CFR 214.2(h)(6)(iii)(B); (o)(2)(i); and
(p)(2)(i), respectively.
7. Beneficiary-Owners
In the fourth prong of the definition of U.S. employer at 8 CFR
214.2(h)(4)(ii), DHS proposes to codify a petitioner's ability to
qualify as a U.S. employer even when the beneficiary possesses a
controlling interest in that petitioner. As discussed above,
historically, USCIS's common law analysis of the employer-employee
relationship has been an impediment for certain beneficiary-owned
businesses to use the H-1B program. While USCIS has not applied the
common law analysis of the employer-employee relationship since June
2020, when it rescinded its 2010 policy memorandum,\135\ DHS believes
that prospective beneficiary-owned businesses may still be reluctant to
participate in the H-1B program due to the legacy of its now-rescinded
memorandum. Through this proposed change to 8 CFR 214.2(h)(4)(ii), DHS
seeks to clarify its current policy and encourage more beneficiary-
owned businesses to participate in the H-1B program.\136\
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\135\ See USCIS, ``Determining Employer-Employee Relationship
for Adjudication of H-1B Petitions, Including Third-Party Site
Placements,'' HQ 70-6.2.8, AD 10-24 (Jan. 8, 2010).
\136\ Again, DHS emphasizes that nothing in the proposed rule
would change the Department of Labor's administration and
enforcement of statutory and regulatory requirements related to
labor condition applications. See 8 U.S.C. 1182(n); 20 CFR part 655,
subparts H and I. These requirements would be unaffected by this
proposed rule and would continue to apply to all H-1B employers.
---------------------------------------------------------------------------

The United States has long been a destination for top talent from
all over the world, including for entrepreneurs and innovators. The
United States continues to build and expand initiatives to support its
evolving workforce with policies such as the passage of the CHIPS and
Science Act of 2022, which will foster innovation in many ways,
including by reducing the barriers of entry to startups.\137\ While the
United States prides itself on its ability to attract global talent,
there are limited pathways for entrepreneurs to come to the United
States under existing regulations. To promote access to H-1Bs for
entrepreneurs, start-up entities, and other beneficiary-owned
businesses, DHS is proposing to add provisions to specifically address
situations where a potential H-1B beneficiary owns a controlling
interest in the petitioning entity. If more entrepreneurs are able to
obtain H-1B status to develop their business enterprises, the United
States could benefit from the creation of jobs, new industries, and new
opportunities.\138\ At the same time, DHS seeks to set reasonable
conditions for when the beneficiary owns a controlling interest in the
petitioning entity to better ensure program integrity. These proposed
conditions would apply when a beneficiary owns a controlling interest,
meaning that the beneficiary owns more than 50 percent of the
petitioner or when the beneficiary has majority voting rights in the
petitioner. These proposed conditions would not apply when a
beneficiary does not own a controlling interest in the petitioning
entity. DHS believes it is reasonable to limit the application of these
conditions to H-1B petitioners where the beneficiary has a controlling
interest to ensure that the beneficiary will be employed in a specialty
occupation in a bona fide job opportunity.
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\137\ See The CHIPS and Science Act of 2022, Public Law 117-167
(Aug. 22, 2022).
\138\ See, e.g., National Bureau of Economic Research, ``Winning
the H-1B Visa Lottery Boosts the Fortunes of Startups'' (Jan. 2020),
https://www.nber.org/digest/jan20/winning-h-1b-visa-lottery-boosts-fortunes-startups (``The opportunity to hire specialized foreign
workers gives startups a leg up over their competitors who do not
obtain visas for desired employees. High-skilled foreign labor
boosts a firm's chance of obtaining venture capital funding, of
successfully going public or being acquired, and of making
innovative breakthroughs.''); Pierre Azoulay, et al., ``Immigration
and Entrepreneurship in the United States'' (National Bureau of
Economic Research, Working Paper 27778 (Sept. 2020), https://www.nber.org/system/files/working_papers/w27778/w27778.pdf
(``immigrants act more as `job creators' than `job takers' and . . .
non-U.S. born founders play outsized roles in U.S. high-growth
entrepreneurship'').
---------------------------------------------------------------------------

One of the proposed conditions is that the beneficiary may perform
duties that are directly related to owning and directing the
petitioner's business as long as the beneficiary will perform specialty
occupation duties authorized under the petition a majority of the time.
See proposed 8 CFR 214.2(h)(4)(ii). ``A majority of the time'' in this
context means that the beneficiary must perform specialty occupation
duties more than 50 percent of the time.
By requiring that the beneficiary perform specialty occupation
duties a majority of the time, the beneficiary-owner would have
flexibility to perform non-specialty occupation duties that are
directly related to owning and directing the petitioner's business.
This proposed rule would not preclude the beneficiary from being
authorized for concurrent employment with two or more entities
(including another entity where the beneficiary is also an owner with a
controlling interest) so long as each entity has been approved to
employ the beneficiary in a specialty occupation and the individual
otherwise satisfies all eligibility requirements. In this concurrent
employment scenario, where a beneficiary seeks concurrent employment
with more than one entity and the beneficiary owns a controlling
interest in each of the petitioners filing to authorize concurrent
employment, the ``majority of the time'' standard must be met with
respect to each petition, and the beneficiary must comply with the
terms and conditions of each petition.
The proposed language at 8 CFR 214.2(h)(4)(ii) would state that a
beneficiary may perform non-specialty occupation duties as long as such
non-specialty occupation duties are directly related to owning and
directing the petitioner's business. Additionally and similar to other
H-1B petitions, a beneficiary-owner may perform some incidental duties,
such as making copies or answering the telephone. DHS expects a
beneficiary-owner would need to perform some non-specialty

[[Page 72906]]

occupation duties when growing a new business or managing the business.
Notwithstanding incidental duties, non-specialty occupation duties must
be directly related to owning and directing the business. These duties
may include, but are not limited to: signing leases, finding investors,
and negotiating contracts. The goal is to ensure that a beneficiary who
is the majority or sole owner and employee of a company would not be
disqualified by virtue of having to perform duties directly related to
owning and directing their own company, while also ensuring that the
beneficiary would still be ``coming temporarily to the United States to
perform services . . . in a specialty occupation'' as required by INA
section 101(a)(15)(H)(i)(b).
The proposed ``majority of the time'' framework would allow a
beneficiary-owner to perform some non-specialty occupation duties that
are directly related to owning and directing the business, as long as a
majority of their time performing the job would be spent performing the
specialty occupation duties authorized in the approved petition. USCIS
would analyze all of the job duties--specialty occupation duties and
non-specialty occupation duties--which the petitioner must accurately
describe in the petition along with the expected percentage of time to
be spent performing each job duty, to determine whether the job would
be in a specialty occupation and to determine whether the non-specialty
occupation duties are directly related to owning and directing the
business. If the beneficiary would spend a majority of their time
performing specialty occupation duties, and if the non-specialty
occupation duties are directly related to owning and directing the
business, then the position may qualify as a specialty occupation.\139\
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\139\ See GCCG Inc v. Holder, 999 F. Supp. 2d 1161, 1167 (N.D.
Cal. 2013) (agreeing with Defendant that for USCIS to find the
petitioner's proffered job to be a specialty occupation, the
majority of the beneficiary's time must be spent performing the
duties of the specialty occupation).
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The ``majority of the time'' analysis would be similar to the
approach generally taken for other H-1B petitions, although it would be
more limiting in order to mitigate against potential abuse.\140\
However, DHS acknowledges that past adjudicative practices have not
been entirely consistent as to what level of non-specialty occupation
duties is permissible and what level of such duties would result in a
finding that the proffered position as a whole does not qualify as a
specialty occupation.\141\ Codifying the ``majority of the time''
framework would provide clarity in the regulations as to what is
permissible in the specific context of beneficiary-owners. This, in
turn, would better ensure consistency in adjudications of petitions
involving beneficiary-owners. DHS again emphasizes that nothing in the
proposed rule would change the Department of Labor's administration and
enforcement of statutory and regulatory requirements related to labor
condition applications, including requirements concerning the
appropriate prevailing wage and wage level when the proffered position
involves a combination of occupations.\142\ For example, in some cases
the petition might involve a combination of occupations that can affect
the petitioner's wage obligation, as detailed in DOL's wage
guidance.\143\ Generally, when an H-1B employer requests a prevailing
wage determination from DOL, the National Prevailing Wage Center will
assign to the position the occupational code that has the higher of the
prevailing wages amongst the combination of occupations. Under this
proposed rule, a petitioner may be authorized to employ a beneficiary-
owner in a combination of occupations, provided that the petitioner
pays the required wage, consistent with existing DOL wage guidance,
even when the beneficiary-owner is performing non-specialty occupation
duties as authorized by USCIS.
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\140\ See, e.g., GCCG Inc v. Holder, 999 F. Supp. 2d 1161, 1165-
68 (N.D. Cal. 2013) (finding the beneficiary to be mainly performing
non-specialty occupation duties and explaining that USCIS requires
the beneficiary's duties to entail mainly the performance of
specialty occupation duties for the position to qualify as a
specialty occupation); Engaged in Life, LLC v. Johnson, No. 14-
06112-CV-DW, 2015 WL 11111211, at *4 (W.D. Mo. Oct. 13, 2015)
(citing GCCG Inc.).
\141\ See, e.g., In Re. 8423340, 2020 WL 9668851, at *12 (AAO
July 27, 2020) (``[W]e will permit the performance of duties that
are incidental to the primary duties of the proffered position as
acceptable when they occur by chance, are intermittent, and are of a
minor consequence. Anything beyond such incidental duties (e.g.,
predictable, recurring, and substantive job responsibilities), must
be specialty occupation duties or the proffered position as a whole
cannot be approved as a specialty occupation.''); In Re. M-C-, 2016
WL 8316337, at *4 (AAO Dec. 23, 2016) (``[A]nything beyond
incidental duties, that is predictable, recurring, and substantive
job responsibilities, must be specialty occupation duties or the
proffered position as a whole cannot be approved as a specialty
occupation.''); In Re. 1280169, 2018 WL 2112902 (AAO Apr. 20, 2018)
(concluding that the beneficiary's position, on the whole, will
include non-qualifying duties inconsistent with those of a
specialty-occupation caliber position because the non-qualifying
duties have not been shown to be incidental to the performance of
the primary duties of the proffered position).
\142\ See 8 U.S.C. 1182(n); 20 CFR part 655, subparts H and I.
\143\ DOL, ``Round 3: Implementation of the Revised Form ETA-
9141 FAQs'' at 1 (July 16, 2021), https://www.dol.gov/sites/dolgov/files/ETA/oflc/pdfs/NPWC%20Round%203%20Frequently%20Asked%20Questions%20-%20Implementation%20of%20Revised%20Form%20ETA-9141.pdf (When there
is a combination of occupations, the SOC code with the highest wage
is assigned.); DOL, ``Prevailing Wage Determination Policy Guidance
Nonagricultural Immigration Programs Revised November 2009'' at 4,
https://www.flcdatacenter.com/download/npwhc_guidance_revised_11_2009.pdf (last visited Oct. 3, 2023) (If
the employer's job opportunity involves a combination of
occupations, the National Prevailing Wage Center should list the
relevant occupational code for the highest paying occupation.).
---------------------------------------------------------------------------

DHS is also proposing to limit the validity period for beneficiary-
owned entities. DHS proposes to limit the validity period for the
initial petition and first extension (including an amended petition
with a request for an extension of stay) of such a petition to 18
months each. See proposed 8 CFR 214.2(h)(9)(iii)(E). Any subsequent
extension would not be limited and may be approved for up to 3 years,
assuming the petition satisfies all other H-1B requirements. DHS
proposes limiting the first two validity periods to 18 months as a
safeguard against possible fraudulent petitions. While DHS sees a
significant advantage in promoting the H-1B program to entrepreneurs,
DHS believes that guardrails for beneficiary-owner petitions would be
helpful to mitigate the potential for abuse of the H-1B program.
Limiting the first two validity periods to 18 months each would allow
DHS adjudicators to review beneficiary-owned petitions more frequently,
and limiting the nature of non-specialty occupation duties that may be
performed, would deter potential abuse and help to maintain the
integrity of the H-1B program. DHS seeks public comments on these
proposed safeguards and additional safeguards and flexibilities for
beneficiary-owned businesses.
8. Site Visits
Pursuant to its authority under INA sections 103(a), 214(a),
235(d)(3) and 287(b), 8 U.S.C. 1103(a), 1184(a), 1225(d)(3) and
1357(b), sections 402, 428 and 451(a)(3) of the HSA, 6 U.S.C. 202, 236
and 271(a)(3), and 8 CFR 2.1, USCIS conducts inspections, evaluations,
verifications, and compliance reviews, to ensure that a petitioner and
beneficiary are eligible for the benefit sought and that all laws have
been complied with before and after approval of such benefits. These
inspections, verifications, and other compliance reviews may be
conducted telephonically or electronically, as well as through physical
on-site inspections (site visits). The existing authority to conduct
inspections, verifications, and other compliance reviews is vital to
the

[[Page 72907]]

integrity of the immigration system as a whole and to the H-1B program
specifically. In this rule, DHS is proposing to add regulations
specific to the H-1B program to codify its existing authority and
clarify the scope of inspections and the consequences of a petitioner's
or third party's refusal or failure to fully cooperate with these
inspections. See proposed 8 CFR 214.2(h)(4)(i)(B)(2). The authority of
USCIS to conduct on-site inspections, verifications, or other
compliance reviews to verify information does not relieve the
petitioner of its burden of proof or responsibility to provide
information in the petition (and evidence submitted in support of the
petition) that is complete, true, and correct.\144\
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\144\ See 8 CFR 103.2(b). In evaluating the evidence, the truth
is to be determined not by the quantity of evidence alone but by its
quality. See Matter of Chawathe, 25 I&N Dec. 376 (quoting Matter of
E-M-, 20 I&N Dec. 77, 80 (Comm'r 1989).
---------------------------------------------------------------------------

In July 2009, USCIS started a compliance review program as an
additional way to verify information in certain visa petitions.\145\
Under this program, USCIS Fraud Detection and National Security (FDNS)
officers make unannounced site visits to collect information as part of
a compliance review. A compliance review verifies whether petitioners
and beneficiaries are following the immigration laws and regulations
that are applicable in a particular case. This process includes
researching information in government databases, reviewing public
records and evidence accompanying the petition, and interviewing the
petitioner and beneficiary.\146\ It also includes conducting site
visits.
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\145\ See USCIS, Administrative Site Visit and Verification
Program, https://www.uscis.gov/about-us/organization/directorates-and-program-offices/fraud-detection-and-national-security-directorate/administrative-site-visit-and-verification-program (last
updated March 6, 2023).
\146\ Outside of the administrative compliance review program,
USCIS conducts forms of compliance review in every case, including,
for example, by researching information in relevant government
databases or by reviewing public records and evidence accompanying
the petition.
---------------------------------------------------------------------------

The site visits conducted by USCIS through its compliance review
program have uncovered a significant amount of noncompliance in the H-
1B program. For instance, during FYs 2019-22, USCIS conducted a total
of 27,062 H-1B compliance reviews and found 5,037 of them, equal to
18.6 percent, to be noncompliant or indicative of fraud.\147\ These
compliance reviews (during FYs 2019-22) consisted of reviews conducted
under both the Administrative Site Visit and Verification Program,
which began in 2009, and the Targeted Site Visit and Verification
Program, which began in 2017. The targeted site visit program allows
USCIS to focus resources where fraud and abuse of the H-1B program may
be more likely to occur.\148\
---------------------------------------------------------------------------

\147\ DHS, USCIS, PRD (2022). PRD196. USCIS conducted these site
visits through its Administrative and Targeted Site Visit Program. A
finding of noncompliance indicates that the petitioner and/or third-
party company is not complying with the terms and conditions of the
petition but does not indicate that the petitioner willfully
misrepresented information provided to USCIS. An example of
noncompliance may include a petitioner sending a worker to an end-
client, who without the petitioner's knowledge, uses the worker to
perform duties substantially different from those specified in the
petition.
\148\ See USCIS, ``Putting American Workers First: USCIS
Announces Further Measures to Detect H-1B Visa Fraud and Abuse,''
(Apr. 3, 2017), https://www.uscis.gov/archive/putting-american-workers-first-uscis-announces-further-measures-to-detect-h-1b-visa-fraud-and-abuse.
---------------------------------------------------------------------------

The data from FYs 2013-19 include data only from the Administrative
Site Visit and Verification Program.\149\ During FYs 2013-16, USCIS
conducted 30,786 H-1B compliance reviews. Of those, 3,811 (12 percent)
were found to be noncompliant.\150\ From FY 2016 through March 27,
2019, USCIS conducted 20,492 H-1B compliance reviews and found 2,341
(11.4 percent) to be noncompliant.\151\ Of the site visits conducted
during FYs 2013-22, lack of cooperation may have contributed to a
finding of noncompliance, although not all findings of noncompliance
mean there was a lack of cooperation.
---------------------------------------------------------------------------

\149\ See USCIS, ``Administrative Site Visit and Verification
Program,'' https://www.uscis.gov/about-us/directorates-and-program-offices/fraud-detection-and-national-security/administrative-site-visit-and-verification-program (last updated Mar. 6, 2023).
\150\ See USCIS, ``Fiscal Year 2017 Report to Congress: H-1B and
L-1A Compliance Review Site Visits, Fraud Detection and National
Security Compliance Review Data (October 1, 2012, to September 30,
2016),'' at 7 (Jan. 17, 2018), https://www.dhs.gov/sites/default/files/publications/USCIS%20-%20H-1B%20and%20L-1A%20Compliance%20Review%20Site%20Visits.pdf (last visited Mar. 23,
2023). Note that USCIS conducted these site visits only through its
Administrative Site Visit Program.
\151\ DHS, USCIS, PRD (2019). Summary of H-1B Site Visits Data.
Note that USCIS conducted these site visits only through its
Administrative Site Visit Program.
---------------------------------------------------------------------------

Site visits are important to maintaining the integrity of the H-1B
program and in detecting and deterring fraud and noncompliance with H-
1B program requirements.\152\ Cooperation is crucial to USCIS's ability
to verify information about employers and workers, and the overall
conditions of employment. Therefore, as noted above, DHS is proposing
additional regulations specific to the H-1B program to set forth the
scope of on-site inspections and the consequences of a petitioner's or
third party's refusal or failure to fully cooperate with these
inspections. This proposed rule would provide a clear disincentive for
petitioners that do not cooperate with compliance reviews and
inspections while giving USCIS a greater ability to access and confirm
information about employers and workers as well as identify fraud.
---------------------------------------------------------------------------

\152\ DHS acknowledges the 2017 Office of Inspector General
report that addressed concerns with the H-1B site visit program and
made recommendations for improvement. DHS, Office of Inspector
General, ``USCIS Needs a Better Approach to Verify H-1B Visa
Participants,'' OIG-18-03 (Oct. 20, 2017), https://www.oig.dhs.gov/sites/default/files/assets/2017/OIG-18-03-Oct17.pdf. Since the
issuance of this report, USCIS has greatly improved its site visit
program pursuant to the report's recommendations, such that USCIS
believes the concerns addressed in the 2017 report no longer
pertain. Specifically, the report's assessment that ``USCIS site
visits provide minimal assurance that H-1B visa participants are
compliant and not engaged in fraudulent activity'' no longer
pertains. As of March 31, 2019, the recommendations have been
resolved. See DHS, Office of Inspector General, ``DHS Open
Unresolved Recommendations Over Six Months Old, as of March 31,
2019,'' https://www.oig.dhs.gov/sites/default/files/DHS-Open-Recommendations-As-Of-033119_053019.pdf (not listing OIG-18-03 as an
``open unresolved'' report). DHS maintains that site visits,
generally, are an important and effective tool for the H-1B program.
The site visit provisions at proposed 8 CFR 214.2(h)(4)(i)(B)(2)(i)
would directly support USCIS's continued efforts to strengthen the
effectiveness of the site visit program and the integrity of the H-
1B program overall.
---------------------------------------------------------------------------

The proposed regulations would make clear that inspections may
include, but are not limited to, an on-site visit of the petitioning
organization'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 USCIS may lawfully obtain and that it considers pertinent
to verify facts related to the adjudication of the petition, such as
facts relating to the petitioner's and beneficiary's eligibility and
continued compliance with the requirements of the H-1B program. See
proposed 8 CFR 214.2(h)(4)(i)(B)(2). The proposed regulation would also
clarify that an inspection may take place at the petitioning
organization's headquarters, satellite locations, or the location where
the beneficiary works or will work, including the beneficiary's home,
or third-party worksites, as applicable. The proposed provisions would
make clear that an H-1B petitioner or any employer must allow access to
all sites where the labor will be performed for the purpose of
determining compliance with applicable H-1B requirements. The word
``employer'' used in this context would include petitioners and third-
party contractors. DHS believes that the ability to inspect various
locations is critical because the purpose of a site

[[Page 72908]]

inspection is to confirm information related to the petition, and any
one of these locations may have information relevant to a given
petition. If the petitioner and any third-party contractor does not
allow USCIS officials to interview H-1B workers, including in the
absence of the employer or the employer's representatives, this may
also result in denial or revocation of the associated H-1B petition(s).
The interviews may take place on the employer's property, or as
feasible, at a neutral location agreed to by the interviewee and USCIS
away from the employer's property. The presence of employer
representatives during such interviews can reasonably be expected to
have a chilling effect on the ability of interviewed workers to speak
freely and, in turn, impede the Government's ability to ensure
compliance with the terms and conditions of the H-1B program.
The proposed regulation also states that if USCIS is unable to
verify facts related to an H-1B petition, including due to the failure
or refusal of the petitioner or third party to cooperate in an
inspection or other compliance review, then the lack of verification of
pertinent facts, including from failure or refusal to cooperate, may
result in denial or revocation of the approval of any petition for
workers who are or will be performing services at the location or
locations that are a subject of inspection or compliance review,
including any third-party worksites. See proposed 8 CFR
214.2(h)(4)(i)(B)(2). A determination that a petitioner or third party
failed or refused to cooperate would be case specific, but it could
include situations where one or more USCIS officers arrived at a
petitioner's worksite, made contact with the petitioner and properly
identified themselves to a petitioner's representative, and the
petitioner refused to speak to the officers or refused entry into the
premises or refused permission to review human resources (HR) records
pertaining to the beneficiary. Failure or refusal to cooperate could
also include situations where a petitioner or employer agreed to speak
but did not provide the information requested within the time period
specified, or did not respond to a written request for information
within the time period specified. Before denying or revoking the
petition, USCIS would provide the petitioner an opportunity to rebut
adverse information and present information on its own behalf in
compliance with 8 CFR 103.2(b)(16).
This new provision would put petitioners on notice of the specific
consequences for noncompliance or lack of cooperation, whether by them
or by a third party. It has long been established that, in H-1B visa
petition proceedings, it is the petitioner's burden to establish
eligibility for the immigration benefit sought.\153\ If USCIS conducts
a site visit to verify facts related to the H-1B petition or to verify
that the beneficiary is or will be employed consistent with the terms
of the petition approval, and is unable to verify relevant facts and
otherwise confirm general compliance, then the petition could properly
be denied or the approval revoked. This would be true whether the
unverified facts related to a petitioner worksite or a third-party
worksite at which a beneficiary had been or would be placed by the
petitioner. It would also be true whether the failure or refusal to
cooperate were by the petitioner or a third party. Petitioners could
consider notifying third parties at whose worksites beneficiaries may
be working about the possibility of DHS verification efforts regarding
the immigration benefit.
---------------------------------------------------------------------------

\153\ See INA section 291, 8 U.S.C. 1361; Matter of Simeio
Solutions, 26 I&N Dec. 542, 549 (AAO 2015) (``It is the petitioner's
burden to establish eligibility for the immigration benefit
sought.''); Matter of Skirball Cultural Center, 25 I&N Dec. 799, 806
(AAO 2012) (``In visa petition proceedings, the burden of proving
eligibility for the benefit sought remains entirely with the
petitioner.'').
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9. Third-Party Placement (Codifying Defensor)
In certain circumstances where an H-1B worker provides services for
a third party, USCIS would look to that third party's requirements for
the beneficiary's position, rather than the petitioner's stated
requirements, in assessing whether the proffered position qualifies as
a specialty occupation. As required by both INA section 214(i)(1) and 8
CFR 214.2(h)(4)(i)(A)(1), an H-1B petition for a specialty occupation
worker must demonstrate that the worker will perform services in a
specialty occupation that requires theoretical and practical
application of a body of highly specialized knowledge and attainment of
a baccalaureate or higher degree in the specific specialty (or its
equivalent) as a minimum requirement for entry into the occupation in
the United States. This proposal would ensure that petitioners are not
circumventing specialty occupation requirements by imposing token
requirements or requirements that are not normal to the third party.
Specifically, under proposed 8 CFR 214.2(h)(4)(i)(B)(3), if the
beneficiary will be staffed to a third party, meaning they will be
contracted to fill a position in a third party's organization, the
actual work to be performed by the beneficiary must be in a specialty
occupation. Therefore, it is the requirements of that third party, and
not the petitioner, that are most relevant when determining whether the
position is a specialty occupation. If the beneficiary will work for a
third party and perform work that is part of the third party's regular
operations, the actual work to be performed by the beneficiary must be
in a specialty occupation based on the requirements for the position
imposed by that third party. While a petitioning employer may be the
entity that hires and pays the beneficiary, the actual services the
beneficiary provides may be for a third party. When interpreting the
meaning of ``perform services . . . in a specialty occupation,'' INA
section 101(a)(15)(H)(i)(b), in the context of certain third-party
placements, USCIS would look to the position requirements imposed by
the third party if the beneficiary will be ``staffed'' to that third
party. Under such an interpretation, a position would not qualify as a
specialty occupation simply because the petitioning employer decides to
require a baccalaureate or higher degree in a specific specialty.\154\
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\154\ See Defensor v. Meissner, 201 F.3d 384, 388 (5th Cir.
2000) (``If only [the employer]'s requirements could be considered,
then any alien with a bachelor's degree could be brought into the
United States to perform a non-specialty occupation, so long as that
person's employment was arranged through an employment agency which
required all clients to have bachelor's degrees. Thus, aliens could
obtain six year visas for any occupation, no matter how unskilled,
through the subterfuge of an employment agency. This result is
completely opposite the plain purpose of the statute and
regulations, which is to limit [H-1B] visas to positions which
require specialized experience and education to perform.'').
---------------------------------------------------------------------------

As stated in proposed 8 CFR 214.2(h)(4)(i)(B)(3), ``staffed'' means
that the beneficiary ``will be contracted to fill a position in a third
party's organization and becomes part of that third party's
organizational hierarchy by filling a position in that hierarchy (and
not merely providing services to the third party.'' There is a
difference between a beneficiary who is ``staffed'' to a third party
and a beneficiary who provides services to a third party (whether or
not at a third-party location). A beneficiary who is ``staffed'' to a
third party becomes part of that third party's organizational hierarchy
by filling a position in that hierarchy, even when the beneficiary
technically remains an employee of the petitioner. In this circumstance
where the beneficiary fills a position within the third party's
organizational hierarchy, the third party would be better

[[Page 72909]]

positioned than the petitioner to be knowledgeable of the actual degree
requirements for the beneficiary's work. Thus, it is reasonable for
USCIS to consider the requirements of the third party as determinative
of whether the position is a specialty occupation. See proposed 8 CFR
214.2(h)(4)(i)(B)(3).
Compared to all cases where the H-1B beneficiary provides services
to a third party, a third party would not always be in a better
position than the petitioner to set the requirements of the proffered
position. For example, a beneficiary may provide software development
services to a third party as part of the petitioner's team of software
developers on a discrete project, or a beneficiary employed by a large
accounting firm may provide accounting services to various third-party
clients. In these examples, proposed 8 CFR 214.2(h)(4)(i)(B)(3) would
not apply, because it would not be reasonable to assume that the third
party would be better positioned than the petitioner to know the actual
degree requirements for the beneficiary's work. DHS narrowed down the
applicability of proposed 8 CFR 214.2(h)(4)(i)(B)(3) to only the subset
of beneficiaries who would be ``staffed'' to a third party because
these examples illustrate how a third party's degree requirements would
not always be as relevant as the petitioner's degree requirements.
Proposed 8 CFR 214.2(h)(4)(i)(B)(3) would be generally consistent
with long-standing USCIS practice.\155\ In Defensor v. Meissner, 201
F.3d 384 (5th Cir. 2000), the court recognized that, if only the
petitioner's requirements are considered, then any beneficiary with a
bachelor's degree could be brought to the United States in H-1B status
to perform non-specialty occupation work, as long as that person's
employment was arranged through an employment agency that required all
staffed workers to have bachelor's degrees. This result would be the
opposite of the plain purpose of the statute and regulations, which is
to limit H-1B visas to positions that require specialized education to
perform the duties. If the work that the beneficiary would actually
perform does not require the theoretical and practical application of a
body of highly specialized knowledge and attainment of a baccalaureate
or higher degree in a specific specialty or its equivalent, then the
position would not qualify as an H-1B specialty occupation. In such a
case, the petitioning employer's stated education and experience
requirements for the beneficiary's position would not be determinative
to the specialty occupation assessment. USCIS would make the
determination as to whether the beneficiary would be ``staffed'' to a
third party on a case-by-case basis, taking into consideration the
totality of the relevant circumstances.
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\155\ See, e.g., In Re. ---, 2010 WL 3010500 (AAO Jan. 12, 2010)
(``In support of this analysis, USCIS routinely cites Defensor v.
Meissner, 201 F.3d 384 (5th Cir. 2000), in which an examination of
the ultimate employment of the beneficiary was deemed necessary to
determine whether the position constitutes a specialty
occupation.''); In Re. 5037859, 2019 WL 6827396 (AAO Nov. 7, 2019)
(``The scenario in Defensor has repeatedly been recognized by
Federal Courts as appropriate in determining which entity should
provide the requirements of an H-1B position and the actual duties a
beneficiary would perform.'') (citing to Altimetrik Corp. v. USCIS,
No. 2:18-cv-11754, at *7 (E.D. Mich. Aug. 21, 2019); Valorem
Consulting Grp. v. USCIS, No. 13-1209-CV-W-ODS, at *6 (W.D. Mo. Jan.
15, 2015); KPK Techs. v. Cuccinelli, No. 19-10342, at *10 (E.D.
Mich. Sep. 16, 2019); Altimetrik Corp. v. Cissna, No. 18-10116, at
*11 (E.D. Mich. Dec. 17, 2018); Sagarwala v. Cissna, No. CV 18-2860
(RC), 2019 WL 3084309, at *9 (D.D.C. July 15, 2019)).
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D. Request for Preliminary Public Input Related to Future Actions/
Proposals

1. Use or Lose
DHS wants to ensure that the limited number of H-1B cap-subject
visas and new H-1B status grants available each fiscal year are used
for non-speculative job opportunities. Demand for H-1B workers who
would be subject to the annual numerical limitations, including those
eligible under the advanced degree exemption, has routinely exceeded
the annual H-1B numerical allocations. DHS believes there is a problem
of petitioners filing H-1B cap-subject petitions even though there is
no job opportunity available as of the requested start date. As
illustrated by the data below, a significant percentage of H-1B
beneficiaries do not enter the United States within six months of the
requested employment start date or H-1B petition approval date,
whichever was later, or within 90 days of the visa validity start date.
The data also show a large percentage of new or amended petitions
received before the beneficiary's arrival in the United States,
suggesting that there may not have been a bona fide job opportunity
available at the time of filing and the initial petition filed was
simply to secure an H-1B cap number for the worker. Given the history
of demand for H-1B visas that greatly exceeds supply, it is of great
concern when a petitioner requests an H-1B cap number and receives
approval, but does not use that approved H-1B petition to employ an H-
1B worker when the petitioner claimed to need that worker to start and
significantly delays such employment by six months or more.
DHS has compiled internal data to help demonstrate the potential
scale of the problem. The first two tables below focus on delayed entry
into the United States by beneficiaries of H-1B cap-subject petitions
that selected consular processing. The third table looks at the same
population of cases and amended or new petitions received prior to the
beneficiary's arrival in the United States. DHS believes that these may
be indicators that the petitioners in these cases had speculative job
opportunities at the time of filing their H-1B petitions.
Table 9 shows data on H-1B cap-subject petitions that selected
consular processing into the United States and that DHS was able to
match with the beneficiary's arrival data into the United States.

[[Page 72910]]

[GRAPHIC] [TIFF OMITTED] TP23OC23.015

This table shows that, from FYs 2017 through 2022 (excepting FY
2021),\156\ on average, approximately 43 percent of H-1B cap-subject
beneficiaries of petitions that selected consular processing (and that
DHS was able to match with the beneficiaries' arrival data) did not
enter the United States in H-1B status within six months of the
requested employment start date on the H-1B petition or the H-1B
petition approval date, whichever was later.\157\ While it is
reasonable to conclude that some of these delays were due to legitimate
reasons (e.g., long consular wait times), other delays may have been
due to illegitimate reasons (e.g., the petitioner filing an H-1B
petition despite not having work available on the requested start
date). While DHS is aware that these data are imperfect, in part
because DHS was not able to match some petitions with beneficiary
arrival data, these data illustrate the scale of the issue--that nearly
half of beneficiaries who consular processed appear to have not entered
the United States in H-1B status within six months of the requested
start date.
---------------------------------------------------------------------------

\156\ FY 2021 data was not included because of the variances in
visa entries and closed borders due to the COVID-19 pandemic.
\157\ These data only track whether a beneficiary entered the
United States in H-1B status after 6 months of the employment start
date or H-1B petition approval date, whichever was later; the data
do not track a beneficiary's prior or subsequent travel history into
or outside of the United States. By capturing data on entries made
after the requested employment start date on the H-1B petition or
the H-1B petition approval date, whichever was later, these data
should exclude entries that were made after 6 months of the
requested employment start date because of a delay in USCIS
approving the H-1B petition.
---------------------------------------------------------------------------

DHS is aware that there have been significant visa delays at some
consulates, especially during the last few years. Table 10 takes this
into account by showing data on H-1B beneficiaries who went through
consular processing, who arrived more than 90 days after their DOS visa
validity start date, and for whom DHS was able to match with arrival
data into the United States with corresponding H-1B petitions.

[[Page 72911]]

[GRAPHIC] [TIFF OMITTED] TP23OC23.016

This table shows that, from FYs 2017 through 2022 (excepting FY
2021),\158\ on average, more than 26 percent of H-1B cap-subject
beneficiaries who selected consular processing arrived in the United
States more than 90 days after the DOS visa validity start date. Again,
while it is reasonable to conclude that some of these delays were due
to legitimate reasons (e.g., a medical emergency pertaining to the
beneficiary or the beneficiary's immediate family), other delays may
have been due to illegitimate reasons (e.g., the petitioner filing an
H-1B petition despite not having work available on the requested start
date).
---------------------------------------------------------------------------

\158\ FY 2021 data was not included because of the variances in
visa entries and closed borders due to the COVID-19 pandemic.
---------------------------------------------------------------------------

DHS has also compiled internal data on the number of amended or new
petitions received prior to the beneficiary's arrival in the United
States, which may also be an indicator that a petitioner had a
speculative job opportunity at the time of filing. Table 11 shows data
on the percentage of amended or new petitions received prior to the
beneficiary's arrival in the United States that DHS was able to match
with the beneficiary's arrival data into the United States.
---------------------------------------------------------------------------

\159\ Part 2, question 2, asks for the ``Basis for
Classification,'' and option ``a'' is for ``New employment.''
\160\ Part 2, question 2, asks for the ``Basis for
Classification,'' and option ``b'' is for ``Continuation of
previously approved employment without change with the same
employer.''
\161\ Part 2, question 2, asks for the ``Basis for
Classification,'' and option ``c'' is for ``Change in previously
approved employment.''
\162\ Part 2, question 2, asks for the ``Basis for
Classification,'' and option ``f'' is for ``Amended petition.''

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[[Page 72912]]

[GRAPHIC] [TIFF OMITTED] TP23OC23.017

Table 11 shows that from FYs 2017 through 2022 (excepting FY
2021),\163\ an average of approximately 15 percent of amended or new
petitions where the beneficiary selected consular processing are
received prior to the beneficiary's arrival in the United States.
Again, while it is reasonable to conclude that some of these amended or
new petitions were due to legitimate reasons (e.g., a legitimate shift
in work location or end-client project), other petitions may have been
filed due to illegitimate reasons (e.g., the petitioner filing an H-1B
petition despite not having work available on the requested start
date). DHS believes that these data illustrate that there may be a
problem with petitioners filing H-1B petitions and taking up cap
numbers without having non-speculative job opportunities as of the
requested start date on the petition.
---------------------------------------------------------------------------

\163\ FY 2021 data was not included because of the variances in
visa entries and closed borders due to the COVID-19 pandemic.
---------------------------------------------------------------------------

DHS is looking for the most effective ways to prevent petitioners
from receiving approval for speculative H-1B employment, and to curtail
the practice of delaying H-1B cap-subject beneficiary's employment in
the United States until a bona fide job opportunity materializes. DHS
has considered various approaches--two of which are discussed below but
has determined that each of them has potentially significant downsides.
For example, although current 8 CFR 214.2(h)(8)(ii)(B) requires
petitioners to notify USCIS if a petition goes unused because the
beneficiary does not apply for admission to the United States, so that
the agency may revoke approval of the petition, this regulatory
provision does not include a deadline for admission or a reporting
deadline. Thus, one approach DHS considered would be to amend 8 CFR
214.2(h)(8)(ii)(B) to require petitioners to notify USCIS if a
beneficiary does not apply for admission after a certain amount of
time, so that USCIS may revoke the approval of the petition. DHS could
add a reporting requirement, so that a failure to report, or reporting
that the beneficiary had not yet been admitted within the required
timeframe, could be a basis for revocation. This proposal would also
afford petitioners an opportunity to provide legitimate reasons for the
delay in admission and avoid revocation. However, this approach would
not prevent a petitioner without a legitimate reason for the delay from
circumventing the intent of this provision, such as by filing an
amended petition for the cap-subject beneficiary and further delaying
their admission, or having the beneficiary enter the United States one
day before the deadline and then leaving shortly thereafter. In
addition, while the revocation of the H-1B petition may serve as a
disincentive to the petitioner and discourage such conduct the next
time around, it may not be the most efficient way to deter the filing
of the H-1B petition itself given the time that would have elapsed
between the time of filing and the final revocation.
Another approach DHS considered would be to create a rebuttable
presumption that a petitioner had only a speculative position available
for the beneficiary of an approved H-1B cap-subject petition, which
would be triggered if certain circumstances occurred. These
circumstances might include delayed entry or filing an amended petition
before the beneficiary would have been admitted to the United States in
H-1B status. If the petitioner were unable to rebut this presumption,
USCIS could deny any extension request based on the previously approved
cap-subject H-1B cap-subject petition and could revoke the initial
petition approval. Regarding delayed entry, DHS considered proposing
that the rebuttable presumption would be triggered if the beneficiary
had not entered the United States in H-1B status either within a
certain number of days of the requested start date or within a

[[Page 72913]]

certain number of days of the validity date of their H-1B nonimmigrant
visa based on the cap-subject petition. Ultimately, DHS concluded that
this approach of a rebuttable presumption would create significant
evidentiary burdens for legitimate petitioners. Further, while it would
bolster program integrity, similar to the first approach, it would not
be an efficient deterrent given the time that would have elapsed
between the time of filing and the denial of the extension request or
the final revocation.
As discussed, DHS is aware that either option could have a broad
reach and potentially include petitions for beneficiaries whose
admission into the United States was delayed for legitimate reasons
beyond their control, such as lengthy consular processing times. Either
option would place an additional burden on petitioners, which may be
particularly difficult to overcome for a subsequent petitioner that is
distinct from the original petitioner that filed the initial H-1B cap-
subject petition. Further, the above options would focus on the
beneficiary's timely admission into the United States but would not
account for the beneficiary's or petitioner's subsequent actions.
Therefore, because DHS believes there is a problem of petitioners
filing H-1B cap-subject petitions for speculative job opportunities
that would not be fully resolved by the changes at proposed 8 CFR
214.2(h)(4)(iii)(F), DHS is seeking preliminary public comments on the
approaches described above, as well as soliciting ideas that would
further curb or eliminate the possibility that petitioners may have
speculative job opportunities at the time of filing or approval of H-1B
petitions and delay admission of H-1B beneficiaries until they have
secured work for them. DHS is hoping to use the public input it
receives to develop proposals that would further strengthen the
programmatic framework and complement provisions already proposed in
this NPRM, such as the proposed requirement that the petitioner
establish a non-speculative position for the beneficiary as of the
start date of the validity period under proposed 8 CFR
214.2(h)(4)(iii)(F) and the proposed requirement that a petitioner have
a bona fide job offer under proposed 8 CFR 214.2(h)(4)(ii).
Specifically, DHS is requesting ideas and, where possible, supporting
data for future regulatory, subregulatory, and enforcement actions that
USCIS could take, alone or in partnership with other agencies, to
mitigate this behavior. With respect to the two approaches discussed
above, DHS encourages commenters to provide input on how a time
restriction on admission, or a rebuttable presumption as described
above, could impact legitimate business practices. DHS also encourages
commenters to provide ideas on other ways DHS could better ensure
petitions are filed only for non-speculative job opportunities without
imposing an unnecessary burden on H-1B cap-subject petitioners.
2. Beneficiary Notification
DHS is seeking preliminary public input on ways to provide H-1B and
other Form I-129 beneficiaries with notice of USCIS actions taken on
petitions filed on their behalf, including receipt notices for a
petition to extend, amend, or change status filed on their behalf.
USCIS does not currently provide notices directly to Form I-129
beneficiaries. DHS is aware that the lack of petition information may
leave Form I-129 beneficiaries unable to verify their own immigration
status and susceptible to employer abuse.\164\ DHS is also aware that
having case status information would improve worker mobility and
protections.
---------------------------------------------------------------------------

\164\ See DHS, Office of the Citizenship and Immigration
Services Ombudsman, Recommendation to Remove a Barrier Pursuant to
Executive Order 14012: Improving U.S. Citizenship and Immigration
Services' Form I-129 Notification Procedures Recommendation Number
62 (Mar. 31, 2022), https://www.dhs.gov/sites/default/files/2022-03/CIS%20OMBUDSMAN_I-129_BENEFICIARY_RECOMMENDATION_fnl_03-2022_508.pdf
(``lack of direct notification may leave them without status
documentation, rendering them noncompliant with the law, susceptible
to abuse by employers, and unable to access benefits requiring proof
of status''). This report formally recommended that USCIS directly
notify beneficiaries of Form I-129 actions taken in the petition on
their behalf.
---------------------------------------------------------------------------

DHS is committed to addressing the issue of beneficiary
notification but is not at this time proposing a specific beneficiary
notification process or regulation. The agency continues to research
and consider the feasibility, benefits, and costs of various options
separate and apart from this proposed rule. At this time, DHS would
like to solicit preliminary public comments on various options, and in
particular, one option currently being considered for potential future
action separate from this rulemaking. This option would require Form I-
129 petitioners to provide a copy of the notice of USCIS action to
beneficiaries in the United States seeking extension or change of
status. DHS believes such notification may be especially beneficial in
the context of extensions or changes of status. While beneficiaries who
are outside of the United States will receive basic petition
information on Form I-94, Arrival-Departure Record, and on their
nonimmigrant visa, beneficiaries who are already in the United States
must rely entirely on petitioners and employers to provide such
information.\165\
---------------------------------------------------------------------------

\165\ The Form I-797 approval notice instructs petitioners that
the lower portion of the notice, including Form I-94, ``should be
given to the beneficiary(ies).''
---------------------------------------------------------------------------

DHS recognizes this option would leave open the possibility that
petitioners would not comply with this requirement, something DHS
intends to forestall, but believes it would still provide benefits and
worker protections while USCIS continues to explore other options,
including the feasibility of technological solutions that would allow
USCIS to directly notify beneficiaries or allow beneficiaries to
directly access case status.\166\ DHS is particularly interested in
comments that cite evidence of the expected costs and burdens on
petitioners as a result of such a requirement, as well as comments and
evidence about the extent that such a provision would benefit H-1B
workers, which DHS will take into consideration when crafting potential
future solutions or regulatory proposals.
---------------------------------------------------------------------------

\166\ See USCIS Memorandum, Response to Recommendations on
Improving Form I-129 Notification Procedures (Aug. 11, 2022),
https://www.dhs.gov/sites/default/files/2022-08/SIGNED%20USCIS%20Response%20to%20Formal%20Recommendation%20-%20Form%20I-129.08122022_v2.pdf.
---------------------------------------------------------------------------

E. Potential Publication of One or More Final Rules

As indicated earlier in this preamble, after carefully considering
public comments it receives on this NPRM, DHS may publish one or more
final rules to codify the provisions proposed in this NPRM.

F. Severability

DHS intends for the provisions of this proposed rule, if finalized
through one or more final rules, to be severable from each other such
that if a court were to hold that any provision is invalid or
unenforceable as to a particular person or circumstance, the rule would
remain in effect as to any other person or circumstance. While the
various provisions of this proposed rule, taken together, would provide
maximum benefit with respect to modernizing the H-1B program and
strengthening program integrity, none of the provisions are
interdependent and unable to operate separately, nor is any single
provision essential to the rule's overall workability. DHS welcomes
public input on the severability of provisions contained in this
proposed rule.

[[Page 72914]]

V. Statutory and Regulatory Requirements

A. Executive Order 12866 (Regulatory Planning and Review) and Executive
Order 13563 (Improving Regulation and Regulatory Review)

Executive Orders (E.O.) 12866 (Regulatory Planning and Review), as
amended by Executive Order 14094 (Modernizing Regulatory Review), and
13563 (Improving Regulation and Regulatory Review) direct agencies to
assess the costs and benefits of available regulatory alternatives and,
if a regulation is necessary, to select regulatory approaches that
maximize net benefits (including potential economic, environmental,
public health and safety effects, distributive impacts, and equity).
E.O. 13563 emphasizes the importance of quantifying both costs and
benefits, of reducing costs, of harmonizing rules, and of promoting
flexibility.
The Office of Management and Budget (OMB) has designated this
proposed rule a ``significant regulatory action'' as defined under
section 3(f) of E.O. 12866, as amended by Executive Order 14094, but it
is not significant under section 3(f)(1) because its annual effects on
the economy do not exceed $200 million in any year of the analysis.
Accordingly, OMB has reviewed this proposed rule.
1. Summary
As discussed in the preamble, the purpose of this rulemaking is to
modernize and improve the regulations governing the H-1B program by:
(1) modernizing and streamlining H-1B program requirements and
improving program efficiency; (2) providing greater benefits and
flexibilities for petitioners and beneficiaries; and (3) improving
integrity measures.
For the 10-year period of analysis of the proposed rule DHS
estimates the annualized net costs of this rulemaking will be
$6,339,779 annualized at 3 percent and 7 percent. Table 12 provides a
more detailed summary of the proposed rule provisions and their
impacts.
BILLING CODE 9111-97-P

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[GRAPHIC] [TIFF OMITTED] TP23OC23.024

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[GRAPHIC] [TIFF OMITTED] TP23OC23.025

[[Page 72923]]

[GRAPHIC] [TIFF OMITTED] TP23OC23.026

[[Page 72924]]

[GRAPHIC] [TIFF OMITTED] TP23OC23.027

In addition to the impacts summarized above, and as required by OMB
Circular A-4, Table 13 presents the prepared accounting statement
showing the costs and benefits that would result if this proposed rule
is finalized.\167\
---------------------------------------------------------------------------

\167\ OMB, Circular A-4 (Sept. 17, 2003), https://www.whitehouse.gov/wp-content/uploads/legacy_drupal_files/omb/circulars/A4/a-4.pdf (last viewed June 1, 2021).

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[[Page 72925]]

[GRAPHIC] [TIFF OMITTED] TP23OC23.028

[[Page 72926]]

[GRAPHIC] [TIFF OMITTED] TP23OC23.029

BILLING CODE 9111-97-C

2. Background

The purpose of this rulemaking is to propose changes that DHS
believes would modernize and improve the regulations relating to the H-
1B program by: (1) streamlining the requirements of the H-1B program
and improving program efficiency; (2) providing greater benefits and
flexibilities for petitioners and beneficiaries; and (3) improving
integrity measures. Some of the proposed provisions would narrowly
impact other nonimmigrant classifications.
3. Costs, Transfers, and Benefits of the Proposed Rule
a. Amended Petitions
DHS proposes to clarify when an amended or new H-1B petition must
be filed due to a change in an H-1B worker's place of employment.
Specifically, this rule proposes to clarify that any change of work
location that requires a new LCA is itself considered a material change
and therefore requires the petitioning employer to file an amended or
new petition with USCIS before the H-1B worker may perform work under
the changed conditions.
This proposed change would clarify requirements for H-1B amended
petitions by codifying Matter of Simeio \168\ and incorporating DOL
rules on when a new LCA is not necessary. DHS estimates that this
proposed change would save petitioners filing amended petitions 5
minutes for each petition (0.08 hours).
---------------------------------------------------------------------------

\168\ See USCIS, ``USCIS Final Guidance on When to File an
Amended or New H-1B Petition After Matter of Simeio Solutions,
LLC,'' PM-602-0120 (July 21, 2015), https://www.uscis.gov/sites/default/files/document/memos/2015-0721_Simeio_Solutions_Transition_Guidance_Memo_Format_7_21_15.pdf.
---------------------------------------------------------------------------

USCIS received a low of 17,057 amended petitions in FY 2022, and a
high of 80,102 amended petitions in FY 2018. Based on the 5-year annual
average, DHS estimates that 59,947 petitioners file for an amended
petition each year shown in Table 14. DHS does not know if all of these
amended petitions are due to a change in an H-1B worker's place of
employment. Because of this, DHS cannot estimate how many of these new
and amended petitions would benefit by consolidating existing
requirements and providing clearer regulatory text pertaining to when a
petitioner must submit an amended or new petition.
[GRAPHIC] [TIFF OMITTED] TP23OC23.030

[[Page 72927]]

DHS conducted a sensitivity analysis to estimate the number of
petitions that may benefit from this proposed change. Table 15 presents
the lower and upper bound number of petitions filed annually for
amended petitions and for new petitions, which corresponds to a range
of 10 to 90 percent.
[GRAPHIC] [TIFF OMITTED] TP23OC23.031

Using the lower and upper bounds of the estimated annual population
for the petitioners who would file amended petitions, DHS estimates the
cost savings based on the opportunity cost of time of gathering and
submitting information by multiplying the estimated time burden savings
for those filing an amended petition (5 minutes or 0.08 hours) by the
compensation rate of an HR specialist, in-house lawyer, or outsourced
lawyer, respectively. DHS does not know the exact number of petitioners
who will choose an in-house or an outsourced lawyer but assumes it may
be a 50/50 split and therefore provides an average. Table 16 shows that
the total annual cost savings would range from $59,545 to $535,801. DHS
estimates the total cost savings to be the average between the lower
bound and the upper bound estimates. Based on this DHS estimates the
average cost savings from this provision to be $297,673.
BILLING CODE 9111-97-P
[GRAPHIC] [TIFF OMITTED] TP23OC23.032

BILLING CODE 9111-97-C
b. Deference to Prior USCIS Determinations of Eligibility in Requests
for Extensions of Petition Validity
DHS seeks to codify and clarify its existing deference policy at
proposed 8 CFR 214.1(c)(5). Deference has helped promote consistency
and efficiency for both USCIS and its stakeholders. The deference
policy instructs officers to consider prior determinations involving
the same parties and facts, when there is no material error with the
prior determination, no material change in circumstances or in
eligibility, and no new material information adversely impacting the
petitioner's, applicant's, or beneficiary's eligibility. This provision
proposes to codify the deference policy \169\ dated April 27, 2021.
Relative to the no action baseline there are no costs to the public.
The benefit of codifying this policy is that

[[Page 72928]]

there may be some transparency benefits to having the policy in the CFR
so the public has the requirements in one place. Relative to a pre-
policy baseline petitioners may need to take time to familiarize
themselves with those changes made in the 2021 deference policy memo.
The provision applies to all nonimmigrant classifications for which
form I-129 is filed to request an extension of stay (i.e., E-1, E-2, E-
3, H-1B, H-1B1, H-2A, H-2B, H-3, L-1, O-1, O-2, P-1, P-1S, P-2, P-2S,
P-3, P-3S, Q-1, R-1, and TN nonimmigrant classifications). The
deference policy had been in effect since 2004 but was rescinded in
2017. After USCIS rescinded deference in 2017, the number of RFEs and
denials increased.
---------------------------------------------------------------------------

\169\ See USCIS, ``Deference to Prior Determinations of
Eligibility in Requests for Extensions of Petition Validity, Policy
Alert,'' PA-2021-05 (April 27, 2021), https://www.uscis.gov/sites/default/files/document/policy-manual-updates/20210427-Deference.pdf
(last visited on Mar. 23, 2023).
---------------------------------------------------------------------------

Table 17 shows the number for Form I-129 RFEs filed for an
extension of stay or amendment of stay, who are applying for a
continuation of previously approved employment or a change in
previously approved employment from FY 2018 through FY 2022. USCIS
received a low of 13,467 RFEs for Form I-129 classifications in FY
2022, and a high of 43,430 RFEs for Form I-129 classifications in FY
2020. Based on a 5-year annual average, 31,327 petitioners who filed
for an extension of stay or amendment of stay, who are applying for a
continuation of previously approved employment or a change in
previously approved employment receive an RFE for Form I-129 per year.
[GRAPHIC] [TIFF OMITTED] TP23OC23.033

DHS is proposing to codify the deference policy that applies to the
adjudication of a petition. This proposed change could affect the
number of RFEs that USCIS sends for Form I-129. USCIS estimates that
there may be a reduction in RFEs, as officers adjudicating a Form I-129
involving the same parties and the same underlying facts would not need
to re-adjudicate eligibility. The reduction in RFEs may save time and
make the overall process faster for petitioners and USCIS.
Table 18 shows the number of Form I-129 receipts, submitted
concurrently with a Form G-28, filed for a continuation of previously
approved employment or a change in previously approved employment, and
requesting an extension of stay or amendment of stay, on which USCIS
issued an RFE. Based on the 5-year annual average, DHS estimates that
23,475 petitioners who received an RFE filed with a Form G-28 and 7,853
petitioners who received an RFE filed without a Form G-28.
BILLING CODE 9111-97-P
[GRAPHIC] [TIFF OMITTED] TP23OC23.034

[[Page 72929]]

DHS conducted a sensitivity analysis to estimate the number of
petitions that may benefit from codifying and clarifying its existing
deference policy. Table 19 presents the lower and upper bound number of
petitions filed annually for amended petitions and for new petitions,
which corresponds to a range of 10 to 90 percent.
[GRAPHIC] [TIFF OMITTED] TP23OC23.035

Using the lower and upper bounds of the estimated annual population
for the petitioners who may no longer have to provide duplicative data,
DHS estimates the cost savings based on the opportunity cost of time of
gathering and submitting duplicative information by multiplying the
estimated time burden to gather information 10 minutes (0.167 hours) by
the compensation rate of an HR specialist, in-house lawyer, or
outsourced lawyer, respectively. DHS does not know the exact number of
petitioners who will choose an in-house or an outsourced lawyer but
assumes it may be a 50/50 split and therefore provides an average.
Table 20 shows that the total annual cost savings due to the codifying
and clarifying its existing deference policy would range from $67,691
to $609,132. DHS estimates the total cost savings to be the average
between the lower bound and the upper bound estimates. Based on this
DHS estimates the average cost savings from this provision to be
$338,412.
[GRAPHIC] [TIFF OMITTED] TP23OC23.036

BILLING CODE 9111-97-C
c. Evidence of Maintenance of Status
DHS seeks to clarify current requirements and codify current
practices concerning evidence of maintenance of status at proposed 8
CFR 214.1(c)(1) through (7). Primarily, DHS seeks to clarify that
evidence of maintenance of status is required for petitions where there
is a request to extend or amend the beneficiary's stay.
This proposed change would list examples of additional evidence
types that petitioners may provide, but would not limit petitioners to
those specific evidence types. The proposed form instructions further
state that if the beneficiary is employed in the United States, the
petitioner may submit copies of the beneficiary's last two pay stubs,
Form W-2, and other relevant evidence, as well as a copy of the
beneficiary's Form I-94, passport, travel document, or Form I-797. This
proposed change may decrease the number of RFEs and NOIDs by clearly
stating what types of supporting documentation are relevant and
clarifying that petitioners should submit such supporting documentation
upfront, rather than waiting for USCIS to issue a request for
additional information. This may benefit petitioners by saving them the
time to review and respond to RFEs and NOIDs.
DHS is proposing to codify into regulation the instructions that,
when seeking an extension of stay, the applicant or petitioner must
submit supporting evidence to establish that the

[[Page 72930]]

applicant or beneficiary maintained the previously accorded
nonimmigrant status before the extension request was filed.
Additionally, DHS is proposing to remove the sentence: ``Supporting
evidence is not required unless requested by the director.'' \170\ DHS
expects that these proposed changes would reduce confusion for
applicants and petitioners, clarify what evidence is required for all
extension of stay requests, and simplify adjudications by decreasing
the need for RFEs and NOIDs.
---------------------------------------------------------------------------

\170\ See proposed 8 CFR 214.2(h)(14). See also proposed 8 CFR
214.2(l)(14)(i) (removing ``Except in those petitions involving new
offices, supporting documentation is not required, unless requested
by the director.''); proposed 8 CFR 214.2(o)(11) and (p)(13)
(removing ``Supporting documents are not required unless requested
by the Director.'').
---------------------------------------------------------------------------

Based on the 5-year annual average, DHS estimates that 299,025 Form
I-129 petitions are filed requesting an extension of stay. Of those
total filed petitions, DHS estimates that 61,781 petitioners who
requested an extension of stay received an RFE and the remaining
237,244 did not receive and RFE as shown in Table 21.
[GRAPHIC] [TIFF OMITTED] TP23OC23.037

DHS estimates that 29,195 petitions are filed requesting to amend
the stay. Of those, DHS estimates that 9,723 petitions that are filed
requesting to amend the stay receive an RFE and 19,473 do not receive
an RFE.
[GRAPHIC] [TIFF OMITTED] TP23OC23.038

DHS estimates that 89,241 petitions are filed requesting to change
status and extend the stay. Of those, DHS estimates that 30,318
petitions that are filed requesting to change status and extend the
stay receive an RFE and 58,922 do not receive an RFE.

[[Page 72931]]

[GRAPHIC] [TIFF OMITTED] TP23OC23.039

It is important to note that issuing RFEs and NOIDs takes time and
effort for adjudicators--to send, receive, and adjudicate
documentation--and it requires additional time and effort for
applicants or petitioners to respond, resulting in extended timelines
for adjudications.\171\ Data on RFEs and NOIDs related to maintenance
of status are not standardized or tracked in a consistent way, thus
they are not very accurate or reliable. Within this context, the data
can provide some insight, however minimal, that these requests and
notices have been present and that they continue to occur.
---------------------------------------------------------------------------

\171\ The regulations state that when an RFE is served by mail,
the response is timely filed if it is received no more than 3 days
after the deadline, providing a total of 87 days for a response to
be submitted if USCIS provides the maximum period of 84 days under
the regulations. The maximum response time for a NOID is 30 days.
See https://www.uscis.gov/policy-manual/volume-1-part-e-chapter-6.
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DHS anticipates that USCIS adjudicators may issue fewer RFEs and
NOIDs related to maintenance of status under this proposed rule due to
clarity of what types of supporting documentation are relevant and
clarification that petitioners should submit such supporting
documentation upfront, rather than waiting for USCIS to issue a request
for additional information, which would reduce the burden on
applicants, petitioners, and adjudicators, and save time processing
applications and petitions. Because the data are not standardized or
tracked consistently DHS cannot estimate how many RFEs and NOIDs are
related to maintenance of status.
d. Eliminating the Itinerary Requirement for H Programs
DHS is proposing to eliminate the H programs' itinerary
requirement. See proposed 8 CFR 214.2(h)(2)(i)(B) and (F). Current 8
CFR 214.2(h)(2)(i)(B) states that ``A petition that requires services
to be performed or training to be received in more than one location
must include an itinerary with the dates and locations of the services
or training and must be filed with USCIS as provided in the form
instructions.'' In addition, current 8 CFR 214.2(h)(2)(i)(F) contains
additional language requiring an itinerary for H petitions filed by
agents as the petitioner.
DHS recognizes this change may affect H-1B petitioners filing for
beneficiaries performing services in more than one location and
submitting itineraries. However, due to the absence of detailed data on
petitioners submitting itineraries, DHS estimates the affected
population as the estimated number of petitions filed annually for
workers placed at off-site locations. DHS assumes the petitions filed
for workers placed at off-site locations are likely to indicate that
beneficiaries may be performing services at multiple locations and,
therefore, petitioners are likely to submit itineraries. Eliminating
the itinerary requirement would reduce petitioner burden and promote
more efficient adjudications, without compromising program integrity.
This proposed change may benefit petitioners who have beneficiaries at
alternative worksites.
Table 24 shows the total number of Form I-129 H-1B Receipts with
and without Form G-28, FY 2018 through FY 2022. USCIS received a low of
398,285 Form I-129 H-1B Receipts in FY 2021, and a high of 474,311 Form
I-129 H-1B Receipts in FY 2022. Based on the 5-year annual average, DHS
estimates that there are 427,822 Form I-129 H-1B petitioners each year.

[[Page 72932]]

[GRAPHIC] [TIFF OMITTED] TP23OC23.040

Table 25 shows the average number of Form I-129 H-1B petitions
approved in FYs 2018-22 for workers placed at off-site locations.
Nearly 31 percent of petitions were approved for workers placed at off-
site locations. DHS uses the estimated 31 percent as the proportion of
both the population of received petitions and the population of
approved petitions that are for workers placed at off-site locations.
[GRAPHIC] [TIFF OMITTED] TP23OC23.041

DHS conducted a sensitivity analysis to estimate the number of H-1B
petitions filed annually for workers placed at off-site locations that
may contain itineraries (132,625).\172\ Table 26 presents the lower and
upper bound number of petitions filed annually for workers placed at
off-site locations who may submit itineraries, which corresponds to a
range of 10 to 90 percent.
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\172\ DHS uses the proportion of petitions approved for off-site
workers (31 percent from Table 25) as an approximate measure to
estimate the number of petitions received annually for off-site
workers from the total number of petitions filed. 132,625 petitions
filed requesting off-site workers = 427,822 petitions filed annually
x 31 percent.
[GRAPHIC] [TIFF OMITTED] TP23OC23.042

Using the lower and upper bounds of the estimated annual population
for H-1B petitioners who may no longer be required to gather and submit
itinerary information, DHS estimates the cost savings based on the
opportunity cost of time of gathering and submitting itinerary
information by multiplying the estimated time burden to gather

[[Page 72933]]

itinerary information (0.08 hours) by the compensation rate of an HR
specialist, in-house lawyer, or outsourced lawyer, respectively. Table
27 shows that the total annual cost savings due to the itinerary
exemption would range from $141,704 to $1,275,277. Since the itinerary
information normally is submitted with the Form I-129 H-1B package,
there would be no additional postage cost savings. DHS estimates the
total cost savings to be the average between the lower bound and the
upper bound estimates. Based on this DHS estimates the average cost
savings from this provision to be $708,491.
BILLING CODE 9111-97-P
[GRAPHIC] [TIFF OMITTED] TP23OC23.043

BILLING CODE 9111-97-C
DHS acknowledges the proposal to eliminate the itinerary
requirement may also affect H petitions filed by agents as well as H-2
petitions filed for beneficiaries performing work in more than one
location or for multiple employers, however, DHS has not estimated
these cost savings here.
e. Validity Period Expires Before Adjudication
DHS proposes to allow H-1B petitions to be approved or have their
requested validity period dates extended if USCIS adjudicates and deems
the petition approvable after the initially requested validity period
end-date, or the period for which eligibility has been established, has
passed. This typically would happen if USCIS deemed the petition
approvable upon a favorable motion to reopen, motion to reconsider, or
appeal.
If USCIS adjudicates an H-1B petition and deems it approvable after
the initially requested validity period end-date, or the last day for
which eligibility has been established, USCIS may issue an RFE asking
whether the petitioner wants to update the dates of intended
employment. This change may increase the number of RFE's; however, it
may save petitioners from having to file another H-1B petition and
USCIS from having to intake and adjudicate another petition.
If in response to the RFE the petitioner confirms that it wants to
update the dates of intended employment and submits a different LCA
that corresponds to the new requested validity dates, even if that LCA
was certified after the date the H-1B petition was filed, and assuming
all other eligibility criteria are met, USCIS would approve the H-1B
petition for the new requested period or the period for

[[Page 72934]]

which eligibility has been established, as appropriate, rather than
require the petitioner to file a new or amended petition. Under a no-
action baseline, the requirement to file an amended or new petition
results in additional filing costs and burden for the petitioner. DHS
expects that this proposed change would save petitioners the difference
between the opportunity cost of time and the fee to file an additional
form, and the nominal opportunity cost of time and expense associated
with responding to the RFE. This proposed change would benefit
beneficiaries selected under the cap, who would retain cap-subject
petitions while their petition validity dates are extended or whose
petitions now may be approved rather than denied based on this
technicality.
f. H-1B Cap Exemptions
DHS proposes to revise the requirements to qualify for H-1B cap
exemption when a beneficiary is not directly employed by a qualifying
institution, organization, or entity at 8 CFR 214.2(h)(8)(iii)(F)(4).
These proposed changes intend to clarify, simplify, and modernize
eligibility for cap-exempt H-1B employment, so that they are less
restrictive and better reflect modern employment relationships. The
proposed changes also intend to provide additional flexibility to
petitioners to better implement Congress's intent to exempt from the
annual H-1B cap certain H-1B beneficiaries who are employed at a
qualifying institution, organization, or entity.
DHS is also proposing to revise 8 CFR 214.2(h)(19)(iii)(C), which
states that a nonprofit research organization is an entity that is
``primarily engaged in basic research and/or applied research,'' and a
governmental research organization is a Federal, State, or local entity
``whose primary mission is the performance or promotion of basic
research and/or applied research.'' DHS proposes to replace ``primarily
engaged'' with ``a fundamental activity of'' in order to permit a
nonprofit entity that conducts research as a fundamental activity but
is not primarily engaged in research to meet the definition of a
nonprofit research entity. This would likely increase the population of
petitioners who are now eligible for the cap exemption and, by
extension, would likely increase the number of petitions that may be
cap-exempt.
These proposed changes would result in a transfer to petitioners
who qualify for a cap exemption for their employees under the proposed
rule. This would reduce transfers for petitioners because the
petitioners would no longer have to pay the registration fee or ACWIA
fees applicable to initial cap-subject petitions. DHS does not have
data to precisely estimate how many additional petitioners would now
qualify for these cap exemptions, but we welcome public comment on this
topic to help inform analysis in the final rule. This proposed change
would be a reduction in transfers from the petitioners to USCIS because
USCIS would no longer receive these petitioners' registration fees.
There would be no change in DHS resources. While DHS cannot estimate
the precise reduction in transfers, DHS estimates that a fairly small
population, between 0.3 percent-0.8 percent of annual petitioners, may
no longer use the H-1B registration tool as a result of these new
exemptions. Using these percentages, DHS estimates that approximately
1,067 \173\ (0.3 percent) up to 2,845 \174\ (0.8 percent) registrants
would no longer pay the $10 registration fee. DHS estimates the
reduction in transfers from registrants to range from $10,670 \175\ to
$28,450 \176\ annually. DHS invites public comment on these transfers
to cap exempt petitioners and the percentage of current registrants
(prospective petitioners who are cap subject) who may no longer submit
a registration for the H-1B cap. While DHS discusses these transfers
qualitatively in this proposal, DHS intends to quantify them in the
final rule.
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\173\ Calculation: 355,592 registrations * 0.3% = 1,067
registrations.
\174\ Calculation: 355,592 registrations * 0.8% = 2,845
registrations.
\175\ Calculation: 1,067 registrations * $10 registration fee =
$10,670 cost savings.
\176\ Calculation: 2,845 registrations * $10 registration fee =
$28,450 cost savings.
---------------------------------------------------------------------------

Aside from the reduction in transfers from not having to pay the
registration fee, petitioners that qualify under the proposed cap
exemptions would also benefit from not having to wait for H-1B cap
season to commence employment. This may allow approved petitioners to
have their H-1B workers commence employment earlier, prior to the
beginning of the fiscal year on October 1.
g. Automatic Extension of Authorized Employment ``Cap-Gap''
DHS proposes to extend the automatic cap-gap extension at 8 CFR
214.2(f)(5)(vi). Currently, the automatic extension is valid only until
October 1 of the fiscal year for which H-1B status is being requested,
but DHS proposes to extend this until April 1 of the fiscal year. See
proposed 8 CFR 214.2(f)(5)(vi). This change would result in more
flexibility for both students and USCIS and would help to avoid
disruption to U.S. employers that are lawfully employing F-1 students
while a qualifying H-1B cap-subject petition is pending.
Each year, a number of U.S. employers seek to employ F-1 students
via the H-1B program by requesting a COS and filing an H-1B cap
petition with USCIS. Many F-1 students complete a program of study or
post-completion OPT in mid-spring or early summer. Per current
regulations, after completing their program or post-completion OPT, F-1
students have 60 days to take the steps necessary to maintain legal
status or depart the United States.\177\ However, because the change to
H-1B status cannot occur earlier than October 1, an F-1 student whose
program or post-completion OPT expires in mid-spring has two or more
months following the 60-day period before the authorized period of H-1B
status begins.
---------------------------------------------------------------------------

\177\ See 8 CFR 214.2(f)(5)(iv).
---------------------------------------------------------------------------

Under current regulations, the automatic cap-gap extension is valid
only until October 1 of the fiscal year for which H-1B status is being
requested. DHS is proposing to change the automatic extension end date
from October 1 to April 1 to avoid disruptions in employment
authorization that some F-1 nonimmigrants awaiting the change to H-1B
status have been experiencing over the past several years. Table 28
shows the historical completions volumes. Based on the 5-year annual
average, DHS estimates that 31,834 F-1 nonimmigrants annually may be
able to avoid employment disruptions while waiting to obtain H-1B
status. Preventing such employment disruptions would also benefit
employers of F-1 nonimmigrants with cap-gap extensions. The change in
the automatic extension end date may benefit petitioners as well.

[[Page 72935]]

[GRAPHIC] [TIFF OMITTED] TP23OC23.044

This proposed change in the automatic extension end date would also
allow USCIS greater flexibility in allocating officer resources to
complete adjudications without the pressure of completing as many COS
requests as possible before October 1. There are additional benefits of
this proposed rule that have not been captured in the summary of costs
and benefits of this rulemaking. DHS estimates that this change would
benefit up to 5 percent (1,592) of the population (31,834) on an annual
basis and on the low end 318 (1 percent); however, F-1 students who are
beneficiaries of H-1B cap petitions that provide cap-gap relief would
be able to avoid employment disruptions while waiting to obtain H-1B
status. DHS estimates that an F-1 student who is the beneficiary of an
H-1B cap petition makes $42.48 \178\ per hour in compensation. Based on
a 40 hour work week,\179\ DHS estimates the potential compensation for
each F-1 student who is the beneficiary of an H-1B cap petition to be
$44,174 \180\ for 6 months of employment from October 1st to April 1st.
DHS estimates that this potential compensation may be a benefit to F-1
students who are seeking a COS to a H-1B status. This benefit ranges
from $14,047,332 \181\ to $70,325,008 \182\ annually. In addition,
other impacts such as payroll taxes and adjustments for the value of
time have not been monetized here, which would reduce the monetized
benefit of this compensation. DHS intends to include these impacts in
the final rule and invites public comment on these additional benefits
to F-1 students who would be the beneficiaries of H-1B petitions.
---------------------------------------------------------------------------

\178\ $42.48 Total Employee Compensation per hour. See BLS,
Economic News Release, ``Employer Costs for Employee Compensation--
December 2022,'' Table 1. ``Employer Costs for Employee Compensation
by ownership [Dec. 2022],'' https://www.bls.gov/news.release/archives/ecec_03172023.htm (last visited Mar. 21, 2023).
\179\ See, e.g., 8 CFR 214.2(f)(5)(vi)(A) (describing cap-gap
employment) and (f)(11)(ii)(B) (describing OPT and noting that it
may be full-time).
\180\ Calculation: $42.48* 40 hours = $1,699 per week * 26 weeks
= $44,174 per 6 months.
\181\ Calculation: $44,174 per 6 months* 318 (1 percent of
31,834) F-1 students = $14,047,332.
\182\ Calculation: $44,174 per 6 months* 1,592 (5 percent of
31,834) F-1 students = $70,325,008.
---------------------------------------------------------------------------

h. Start Date Flexibility for Certain H-1B Cap-Subject Petitions
DHS proposes to eliminate all the text currently at 8 CFR
214.2(h)(8)(iii)(A)(4), which relates to a limitation on the requested
start date, because the current regulatory language is ambiguous. The
removal of this text would provide clarity and flexibility to employers
with regard to the start date listed on H-1B cap-subject petitions.
This clarity may help petitioners by reducing confusion as to what
start date they have to put on the petition.
In 2020, USCIS implemented the first electronic registration
process for the FY 2021 H-1B cap. In that year, and for each subsequent
fiscal year, prospective petitioners seeking to file H-1B cap-subject
petitions (including for beneficiaries eligible for the advanced degree
exemption) were required to first electronically register and pay the
associated H-1B registration fee for each prospective beneficiary.
Because of this DHS only has data for Cap Year 2021 through FY 2023.
Table 29 shows the number of cap-subject registrations received and
selected by USCIS during Cap Year 2021 through FY 2023. Based on the 3-
year annual average DHS estimates that 127,980 registrations are
selected each year. DHS cannot estimate the number of petitioners that
would benefit from this clarification to the start date on their
petition.

[[Page 72936]]

[GRAPHIC] [TIFF OMITTED] TP23OC23.045

This proposed change is also a potential cost savings to
petitioners who, in the event USCIS cap-subject petitions that were
rejected solely due to start date, would no longer need to re-submit
their petition(s).
i. The H-1B Registration System
Through issuance of a final rule in 2019, Registration Requirement
for Petitioners Seeking To File H-1B Petitions on Behalf of Cap-Subject
Aliens,\183\ DHS developed a new way to administer the H-1B cap
selection process to streamline processing and provide overall cost
savings to employers seeking to file H-1B cap-subject petitions. In
2020, USCIS implemented the first electronic registration process for
the FY 2021 H-1B cap. In that year, and for each subsequent fiscal
year, prospective petitioners seeking to file H-1B cap-subject
petitions (including for beneficiaries eligible for the advanced degree
exemption) were required to first electronically register and pay the
associated H-1B registration fee for each prospective beneficiary. When
registration is required, an H-1B cap-subject petition is not eligible
for filing unless it is based on a selected registration that was
properly submitted by the prospective petitioner, or their
representative, for the beneficiary.
---------------------------------------------------------------------------

\183\ See ``Registration Requirement for Petitioners Seeking To
File H-1B Petitions on Behalf of Cap-Subject Aliens,'' 84 FR 888
(Jan. 31, 2019).
---------------------------------------------------------------------------

Table 30 shows the number of cap registration receipts by year, as
well as the number of registrations that were selected to file I-129 H-
1B petitions. The number of registrations has increased over the past 3
years. DHS believes that this increase is partially due to the increase
in multiple companies submitting registrations for the same
beneficiary. USCIS received a low of 274,237 H-1B Cap-Subject
Registrations for cap year FY 2021, and a high of 483,927 H-1B Cap-
Subject Registrations for cap year 2023. DHS has not included cap year
2024 data into this analysis because such data are incomplete.\184\
---------------------------------------------------------------------------

\184\ While the initial registration selection process has been
completed, DHS is unable to determine at this time how many total
petitions will be submitted within the filing period.
[GRAPHIC] [TIFF OMITTED] TP23OC23.046

DHS estimates the current public reporting time burden for an H-1B
Registration is 31 minutes (0.5167 hours), which includes the time for
reviewing instructions, gathering the

[[Page 72937]]

required information, and submitting the registration.
The number of Form G-28 submissions allows USCIS to estimate the
number of H-1B registrations that an attorney or accredited
representative submits and thus estimate the opportunity costs of time
for an attorney or accredited representative to file each form. Table
31 shows the number of Cap-Subject registrations received with and
without Form G-28. USCIS received a low of 148,964 Cap-Subject
Registrations with Form G-28 in cap year 2022, and a high of 207,053
Cap-Subject Registrations with Form G-28 in cap year 2023. Based on a
3-year annual average, DHS estimates the annual average receipts of
Cap-Subject Registrations to be 171,330 with 48 percent of
registrations submitted by an attorney or accredited representative.
[GRAPHIC] [TIFF OMITTED] TP23OC23.047

In order to estimate the opportunity costs of time for completing
and filing an H-1B registration DHS assumes that a registrant will use
an HR specialist, an in-house lawyer, or an outsourced lawyer to
prepare an H-1B registration.\185\ DHS uses the mean hourly wage of
$35.13 for HR specialists to estimate the opportunity cost of the time
for preparing and submitting the H-1B registration.\186\ Additionally,
DHS uses the mean hourly wage of $78.74 for in-house lawyers to
estimate the opportunity cost of the time for preparing and submitting
the H-1B registration.\187\
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\185\ USCIS limited its analysis to HR specialists, in-house
lawyers, and outsourced lawyers to present estimated costs. However,
USCIS understands that not all entities employ individuals with
these occupations and, therefore, recognizes equivalent occupations
may also prepare and file these petitions or registrations.
\186\ See BLS, ``Occupational Employment and Wage Statistics,
Occupational Employment and Wages, May 2022, 13-1071 Human Resources
Specialists,'' https://www.bls.gov/oes/2022/may/oes131071.htm (last
visited May 11, 2023).
\187\ See BLS, ``Occupational Employment and Wage Statistics,
Occupational Employment and Wages, May 2022, 23-1011 Lawyers,''
https://www.bls.gov/oes/2022/may/oes231011.htm (last visited May 11,
2023).
---------------------------------------------------------------------------

DHS accounts for worker benefits when estimating the total costs of
compensation by calculating a benefits-to-wage multiplier using the BLS
report detailing the average employer costs for employee compensation
for all civilian workers in major occupational groups and industries.
DHS estimates that the benefits-to-wage multiplier is 1.45 and,
therefore, is able to estimate the full opportunity cost per
petitioner, including employee wages and salaries and the full cost of
benefits such as paid leave, insurance, retirement, etc.\188\ DHS
multiplied the average hourly U.S. wage rate for HR specialists and in-
house lawyers by 1.45 to account for the full cost of employee
benefits, for a total of $50.94 \189\ per hour for an HR specialist and
$114.17 \190\ per hour for an in-house lawyer. DHS recognizes that a
firm may choose, but is not required, to outsource the preparation of
these petitions and, therefore, presents two wage rates for lawyers. To
determine the full opportunity costs of time if a firm hired an
outsourced lawyer, DHS multiplied the average hourly U.S. wage rate for
lawyers by 2.5 \191\ for a total of $196.85 \192\ to approximate an
hourly wage rate for an outsourced lawyer \193\ to prepare and submit
an H-1B registration.\194\
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\188\ The benefits-to-wage multiplier is calculated as follows:
(Total Employee Compensation per hour)/(Wages and Salaries per hour)
($42.48 Total Employee Compensation per hour)/($29.32 Wages and
Salaries per hour) = 1.44884 = 1.45 (rounded). See BLS, Economic
News Release, ``Employer Costs for Employee Compensation'' (Dec.
2022), Table 1. ``Employer Costs for Employee Compensation by
ownership'' (Dec. 2022), https://www.bls.gov/news.release/archives/ecec_03172023.htm (last visited Mar. 21, 2023). The Employer Costs
for Employee Compensation measures the average cost to employers for
wages and salaries and benefits per employee hour worked.
\189\ Calculation: $35.13 * 1.45 = $50.94 total wage rate for HR
specialist.
\190\ Calculation: $78.74 * 1.45 = $114.17 total wage rate for
in-house lawyer.
\191\ The ICE ``Safe-Harbor Procedures for Employers Who Receive
a No-Match Letter'' used a multiplier of 2.5 to convert in-house
attorney wages to the cost of outsourced attorney based on
information received in public comment to that rule. We believe the
explanation and methodology used in the Final Small Entity Impact
Analysis for that rule remains sound for using 2.5 as a multiplier
for outsourced labor wages in this proposed rule, see https://www.regulations.gov/document/ICEB-2006-0004-0922, at page G-4.
\192\ Calculation: $78.74 * 2.5 = $196.85 total wage rate for an
outsourced lawyer.
\193\ The DHS analysis in ``Exercise of Time-Limited Authority
To Increase the Fiscal Year 2018 Numerical Limitation for the H-2B
Temporary Nonagricultural Worker Program,'' 83 FR 24905 (May 31,
2018), https://www.federalregister.gov/documents/2018/05/31/2018-11732/exercise-of-time-limited-authority-to-increase-the-fiscal-year-2018-numerical-limitation-for-the, used a multiplier of 2.5 to
convert in-house attorney wages to the cost of outsourced attorney
wages. The DHS Immigration and Customs Enforcement (ICE) rule
``Final Small Entity Impact Analysis: `Safe-Harbor Procedures for
Employers Who Receive a No-Match Letter' '' at G-4 (Aug. 25, 2008),
https://www.regulations.gov/document/ICEB-2006-0004-0922, also uses
a multiplier. The methodology used in the Final Small Entity Impact
Analysis remains sound for using 2.5 as a multiplier for outsourced
labor wages in this proposed rule.
\194\ The DHS analysis in ``Exercise of Time-Limited Authority
To Increase the Fiscal Year 2018 Numerical Limitation for the H-2B
Temporary Nonagricultural Worker Program,'' 83 FR 24905 (May 31,
2018), https://www.federalregister.gov/documents/2018/05/31/2018-11732/exercise-of-time-limited-authority-to-increase-the-fiscal-year-2018-numerical-limitation-for-the, used a multiplier of 2.5 to
convert in-house attorney wages to the cost of outsourced attorney
wages. Also, the analysis for a DHS ICE rule, ``Final Small Entity
Impact Analysis: `Safe-Harbor Procedures for Employers Who Receive a
No-Match Letter' '' at G-4 (Aug. 25, 2008), https://www.regulations.gov/document/ICEB-2006-0004-0922, used a multiplier.
The methodology used in the Final Small Entity Impact Analysis
remains sound for using 2.5 as a multiplier for outsourced labor
wages in this proposed rule.

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[[Page 72938]]

Table 32 displays the estimated annual opportunity cost of time for
submitting an H-1B registration employing an in-house or outsourced
lawyer to complete and submit an H-1B registration. DHS does not know
the exact number of registrants who will choose an in-house or an
outsourced lawyer but assumes it may be a 50/50 split and therefore
provides an average. These current opportunity costs of time for
submitting an H-1B registration using an attorney or other
representative are estimated to range from $10,107,038 to $17,426,385
with an average of $13,766,712.
[GRAPHIC] [TIFF OMITTED] TP23OC23.048

To estimate the current remaining opportunity cost of time for an
HR specialist submitting an H-1B registration without a lawyer, DHS
applies the estimated public reporting time burden (0.5167 hours) to
the compensation rate of an HR specialist. Table 33 estimates the
current total annual opportunity cost of time to HR specialists
completing and submitting an H-1B registration will be approximately
$4,849,904.
[GRAPHIC] [TIFF OMITTED] TP23OC23.049

Table 34 shows the proposed estimated time burden will increase by
5 minutes to 36 minutes (0.6 hours) to the eligible population and
compensation rates of those who may submit registrations with or
without a lawyer due to changes in the instructions, adding clarifying
language regarding denying or revoking approved H-1B petitions, adding
passport instructional language, and adding verification before
submitting instructions. DHS does not know the exact number of
registrants who will choose an in-house or an outsourced lawyer but
assumes it may be a 50/50 split and therefore provides an average. DHS
estimates that these current opportunity costs of time for submitting
an H-1B registration using an attorney or other representative range
from $11,736,448 to $20,235,786 with an average of $15,986,117.

[[Page 72939]]

[GRAPHIC] [TIFF OMITTED] TP23OC23.050

To estimate the current remaining opportunity cost of time for an
HR specialist submitting an H-1B registration without a lawyer, DHS
applies the proposed estimated public reporting time burden (0.6 hours)
to the compensation rate of an HR specialist. Table 35 estimates the
current total annual opportunity cost of time to HR specialists
completing and submitting the H-1B registration will be approximately
$5,631,784.
[GRAPHIC] [TIFF OMITTED] TP23OC23.051

DHS estimates the total additional annual cost to petitioners
completing and filing Form I-129 H-1B are expected to be $3,001,285
shown in Table 36. This table shows the current total opportunity cost
of time to submit an H-1B registration and the proposed total
opportunity cost of time.
[GRAPHIC] [TIFF OMITTED] TP23OC23.052

[[Page 72940]]

j. Beneficiary Centric Selection
Under the proposed provision, DHS would modify the random selection
process. Registrants would continue to submit registrations on behalf
of beneficiaries, and beneficiaries would continue to be able to have
more than one registration submitted on their behalf, as generally
allowed by applicable regulations. If a random selection were necessary
(meaning, more registrations are submitted than the number of
registrations USCIS projected as needed to reach the numerical
allocations), then the random selection would be based on each unique
beneficiary identified in the registration pool, rather than each
registration. If a beneficiary is selected, then all registrants who
properly submitted a registration for that selected beneficiary would
be notified of the selection and that they are eligible to file an H-1B
cap petition on behalf of the beneficiary during the applicable
petition filing period.
DHS believes that changing how USCIS conducts the selection process
to select by unique beneficiaries instead of registrations would give
each unique beneficiary an equal chance at selection and would reduce
the advantage that beneficiaries with multiple registrations submitted
on their behalf have over beneficiaries with a single registration
submitted on their behalf. DHS believes that it would also reduce the
incentive that registrants may have to work with others to submit
registrations for the same beneficiary to unfairly increase the chance
of selection for the beneficiary because doing so under the
beneficiary-centric selection approach would not result in an increase
in the odds of selection. Selecting by unique beneficiary could also
result in other benefits, such as giving beneficiaries greater autonomy
regarding their H-1B employment and improving the chances of selection
for legitimate registrations.
Because the integrity of the new selection process would rely on
USCIS's ability to accurately identify each individual beneficiary, and
all registrations submitted on their behalf, DHS proposes to require
the submission of valid passport information, including the passport
number, country of issuance, and expiration date, in addition to the
currently required information. See proposed 8 CFR
214.2(h)(8)(iii)(A)(4)(ii). While the proposed passport requirement
could impact individuals who do not yet hold passports at the time of
registration, DHS has determined the described benefits of program
integrity outweigh any additional burden to prospective beneficiaries.
DHS invites public comment on the proposed passport requirement.
DHS estimates that the annual average receipts of H-1B
registrations is 355,592 with 71 percent of registrations being
submitted for a beneficiary with only a single registration. DHS
estimates that 29 percent \195\ of registrations are submitted by
companies for beneficiaries who have also had other registrations
submitted on their behalf. Based on this new provision DHS estimates
that there may be a reduction in registrations because beneficiaries
will be less inclined to find as many different employers to submit
registrations on their behalf as doing so would not affect their chance
of selection. Also, DHS expects to see less abuse by unscrupulous
registrants as they would not be able to increase the chance of
selection for a beneficiary by working together with others to submit
multiple registrations for the same beneficiary.
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\195\ Calculation: 100%-71% Registrations for a single
beneficiary = 29% Registrations submitted for multiple
beneficiaries.
\196\ Calculation: Total Registrations 355,592--Total number of
unique beneficiaries with registrations submitted on their behalf
282,091 = 73,501 Estimate of registrations that may no longer be
submitted.
[GRAPHIC] [TIFF OMITTED] TP23OC23.053

DHS estimates that 73,501 \196\ registrations annually may no
longer be submitted due to this proposed change. Of those 73,501
registrations, DHS estimated that an attorney or accredited
representative submitted 48 percent of registrations and an HR
representative submitted the remaining 52 percent shown in Table 31.
Table 38 displays the estimated annual opportunity cost of time for
submitting an H-1B registration employing an in-house or outsourced
lawyer to complete and submit an H-1B registration. DHS does not know
the exact number of prospective petitioners who will choose an in-house
or an outsourced lawyer but assumes it may be a 50/50 split and
therefore provides an average. DHS estimates that these current
opportunity costs of time for submitting an H-1B registration using an
attorney or other representative range from $2,081,225 to $3,588,413,
with an average of $2,834,819.

[[Page 72941]]

[GRAPHIC] [TIFF OMITTED] TP23OC23.054

To estimate the current remaining opportunity cost of time for an
HR specialist submitting an H-1B registration without a lawyer, DHS
applies the estimated public reporting time burden (0.5167 hours) to
the compensation rate of an HR specialist. Table 39 estimates the
current total annual opportunity cost of time to HR specialists
completing and submitting an H-1B registration will be approximately
$1,006,003.
[GRAPHIC] [TIFF OMITTED] TP23OC23.055

DHS estimates the total annual opportunity cost savings of time for
not having to complete and submit H-1B registrations for beneficiaries
with multiple registrations are expected to be $3,840,822, shown in
Table 40.
[GRAPHIC] [TIFF OMITTED] TP23OC23.056

Prospective petitioners seeking to file H-1B cap-subject petitions,
including for beneficiaries eligible for the advanced degree exemption,
must first electronically register and pay the associated $10 H-1B
registration fee for each prospective beneficiary. Due to this proposed
change DHS estimates that prospective petitioners may now see an
additional cost savings of $735,010. The annual total cost savings of
this proposed beneficiary centric selection is $4,575,832.\197\
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\197\ Calculation: Total Opportunity Cost Savings of time for H-
1B Registrations ($3,840,822) + Total Cost Savings for Registration
Fees ($735,010) = $4,575,832 Total Cost Savings.
[GRAPHIC] [TIFF OMITTED] TP23OC23.057

[[Page 72942]]

k. Bar on Multiple Registrations Submitted by Related Entities
DHS regulations already preclude the filing of multiple H-1B cap-
subject petitions by related entities for the same beneficiary unless
the related petitioners can establish a legitimate business need for
filing multiple cap-subject petitions for the same beneficiary. DHS is
not proposing to change this in the current regulation. Rather, DHS is
proposing to extend a similar limitation to the submission of
registrations by related entities. See proposed 8 CFR
214.2(h)(2)(i)(G). When an employer submits a registration, they attest
that they intend to file a petition based on that registration and that
there is a legitimate job offer. To allow related employers to submit
registrations without a legitimate business need, but not allow them to
file petitions without a legitimate business need, creates an
inconsistency between the antecedent procedural step of registration
and the petition filing. Extending the bar on multiple petition filings
by related entities to multiple registration submissions by related
entities for the same cap-subject beneficiary would harmonize the
expectations for petition filing and registration submission.
While the proposed changes to the beneficiary centric selection are
intended to reduce frivolous registrations, DHS cannot guarantee with
certainty that such change would eliminate entities from working with
each other to submit registrations to unfairly increase chances of
selection for a beneficiary by submitting slightly different
identifying information or other means. Therefore, this provision may
serve as an additional deterrent to further reduce the incentive for
companies filing multiple registrations to have a higher chance of
selection. This change may benefit petitioners whose chances of
selection have been negatively affected by companies filing multiple
registrations to increase the chances of selection. DHS cannot estimate
the number of petitioners that this provision may benefit, because DHS
cannot accurately measure how many petitioners are not submitting
legitimate registrations or filing legitimate petitions in this manner.
l. Registrations With False Information or That Are Otherwise Invalid
Although registration is an antecedent procedural step undertaken
prior to filing an H-1B cap-subject petition, the validity of the
registration information is key to the registrant's eligibility to file
a petition. As stated in the current regulations, ``[t]o be eligible to
file a petition for a beneficiary who may be counted against the H-1B
regular cap or the H-1B advanced degree exemption for a particular
fiscal year, a registration must be properly submitted in accordance
with 8 CFR 103.2(a)(1), [8 CFR 214.2(h)(8)(iii),] and the form
instructions.'' See 8 CFR 214.2(h)(8)(iii)(A)(1). USCIS does not
consider a registration to be properly submitted if the information
contained in the registration, including the required attestations, was
not true and correct. Currently, the regulations state that it is
grounds for denial or revocation if the statements of facts contained
in the petition are not true and correct, inaccurate, fraudulent, or
misrepresented a material fact. DHS proposes to clarify in the
regulations that the grounds for denial of an H-1B petition or
revocation of an H-1B petition approval extend to the information
provided in the registration and to expressly state in the regulations
that this includes attestations on the registration that are determined
by USCIS to be false.
DHS is also proposing changes to the regulations governing
registration that would provide USCIS with clearer authority to deny or
revoke the approval of a petition based on a registration that was not
properly submitted or was otherwise invalid.
Specifically, DHS is proposing to add that if a petitioner submits
more than one registration per beneficiary in the same fiscal year, all
registrations filed by that petitioner relating to that beneficiary for
that fiscal year may be considered not only invalid, but that ``USCIS
may deny or revoke the approval of any petition filed for the
beneficiary based on those registrations.''
Additionally, DHS is proposing to add that USCIS may deny or revoke
the approval of an H-1B petition if it determines that the fee
associated with the registration is declined, not reconciled, disputed,
or otherwise invalid after submission.
These proposed changes may increase the need for RFEs and NOIDs. It
is important to note that issuing RFEs and NOIDs takes time and effort
for adjudicators--to send, receive, and adjudicate documentation--and
it requires additional time and effort for petitioners to respond,
resulting in extended timelines for adjudications.\198\ Data on RFEs
and NOIDs related to H-1B false information are not standardized or
tracked in a consistent way, thus they are not accurate or reliable.
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\198\ The regulations state that when an RFE is served by mail,
the response is timely filed if it is received no more than 3 days
after the deadline, providing a total of 87 days for a response to
be submitted if USCIS provides the maximum period of 84 days under
the regulations. The maximum response time for a NOID is 30 days.
See https://www.uscis.gov/policy-manual/volume-1-part-e-chapter-6.
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m. Provisions To Ensure Bona Fide Job Offer for a Specialty Occupation
Position
(1) Contracts
DHS proposes to codify USCIS' authority to request contracts, work
orders, or similar evidence. See proposed 8 CFR 214.2(h)(4)(iv)(C).
Such evidence may take the form of contracts or legal agreements, if
available, or other evidence including technical documentation,
milestone tables, or statements of work. Evidence submitted should show
the contractual relationship between all parties, the terms and
conditions of the beneficiary's work, and the minimum educational
requirements to perform the duties.
While USCIS already has the authority to request contracts and
other similar evidence, the regulations do not state this authority. By
proposing to codify this authority, USCIS is putting stakeholders on
notice of the kinds of evidence that could be requested to establish
the terms and conditions of the beneficiary's work and the minimum
educational requirements to perform the duties. This evidence, in turn,
could establish that the petitioner has a bona fide job offer for a
specialty occupation position for the beneficiary. Relative to the no
action baseline, this change has no costs associated with it, and there
may be transparency benefits due to this proposed change. Relative to
the pre policy baseline petitioners may have taken time to find
contracts or legal agreements, if available, or other evidence
including technical documentation, milestone tables, or statements of
work. DHS cannot estimate how much time it would have taken for
petitioners to provide that information.
(2) Non-Speculative Employment
DHS proposes to codify its requirement that the petitioner must
establish, at the time of filing, that it has a non-speculative
position in a specialty occupation available for the beneficiary as of
the start date of the validity period as requested on the petition. See
proposed 8 CFR 214.2(h)(4)(iv)(D). This change is consistent with
current DHS policy guidance that an H-1B petitioner must establish that
employment exists at the time of filing the petition and that

[[Page 72943]]

it may employ the beneficiary in a specialty occupation.\199\ Relative
to the no action baseline, this change has no costs associated with it,
and there may be transparency benefits due to this proposed change.
Relative to the pre policy baseline petitioners may require time to
provide documentation to establish that their position was a non-
speculative position in a specialty occupation. DHS cannot estimate how
much time it takes for petitioners to provide that information.
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\199\ See USCIS, ``Rescission of Policy Memoranda,'' PM-602-0114
(June 17, 2020) (citing Matter of Chawathe, 25 I&N Dec. 369 (AAO
2010)).
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(3) LCA Corresponds With the Petition
DHS is proposing to update the regulations to expressly include
DHS's existing authority to ensure that the LCA properly supports and
corresponds with the accompanying H-1B petition. Relative to the no
action baseline, this change has no costs and may yield transparency
benefits due to consistency between regulation and current policy.
Relative to the pre policy baseline petitioners may have taken time to
provide their LCA to DHS, however DHS cannot estimate how much time it
would have taken for petitioners to provide that information.
(4) Revising the Definition of U.S. Employer
DHS is proposing to revise the definition of ``United States
employer.'' First, DHS proposes to eliminate the employer-employee
relationship requirement. In place of the employer-employee
relationship requirement, DHS proposes to codify the requirement that
the petitioner has a bona fide job offer for the beneficiary to work,
which may include telework, remote work, or other off-site work within
the United States. DHS also proposes to replace the requirement that
the petitioner ``[e]ngages a person to work within the United States''
with the requirement that the petitioner have a legal presence and is
amenable to service of process in the United States. Relative to the no
action baseline, this change has no costs associated with it, and there
may be transparency benefits due to this proposed change. Relative to
the pre policy baseline, petitioners may require time to provide
documentation establishing a bona fide job offer for the beneficiary to
work. DHS cannot estimate how much time petitioners take to provide
that information.
(5) Employer-Employee Relationship
DHS proposes to eliminate the employer-employee relationship
requirement, which, in the past, has been a significant barrier to the
H-1B program for certain petitioners, including beneficiary-owned
petitioners. This proposed change would benefit petitioners because it
may decrease confusion and increase clarity for stakeholders. Relative
to the no action baseline, this change has no costs associated with it,
and there may be transparency benefits due to this proposed change.
Relative to the pre policy baseline petitioners may have taken time to
understand the change.
n. Beneficiary-Owners
DHS proposes to codify a petitioner's ability to qualify as a U.S.
employer even when the beneficiary possesses a controlling interest in
that petitioner. To promote access to H-1Bs for entrepreneurs, start-up
entities, and other beneficiary-owned businesses, DHS is proposing to
add provisions to specifically address situations where a potential H-
1B beneficiary owns a controlling interest in the petitioning entity.
If more entrepreneurs are able to obtain H-1B status to develop their
business enterprise, the United States could benefit from the creation
of jobs, new industries, and new opportunities.\200\ This proposed
change would benefit H-1B petitions filed by start-up entities and
other beneficiary-owned businesses, or filed on behalf of entrepreneurs
who have a controlling interest in the petitioning entity. DHS is
unable to estimate how many petitioners would benefit from this
proposed change.
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\200\ See, e.g., National Bureau of Economic Research, ``Winning
the H-1B Visa Lottery Boosts the Fortunes of Startups'' (Jan. 2020),
https://www.nber.org/digest/jan20/winning-h-1b-visa-lottery-boosts-fortunes-startups (``The opportunity to hire specialized foreign
workers gives startups a leg up over their competitors who do not
obtain visas for desired employees. High-skilled foreign labor
boosts a firm's chance of obtaining venture capital funding, of
successfully going public or being acquired, and of making
innovative breakthroughs.''). Pierre Azoulay, et. al, ``Immigration
and Entrepreneurship in the United States'' (National Bureau of
Economic Research, Working Paper 27778 (Sept. 2020) https://www.nber.org/system/files/working_papers/w27778/w27778.pdf
(``immigrants act more as `job creators' than `job takers' and . . .
non-U.S. born founders play outsized roles in U.S. high-growth
entrepreneurship'').
---------------------------------------------------------------------------

DHS is also proposing to limit the validity period for beneficiary-
owned entities. DHS proposes to limit the validity period for the
initial petition and first extension (including an amended petition
with a request for an extension of stay) of such a petition to 18
months. See proposed 8 CFR 214.2(h)(9)(iii)(E). Any subsequent
extension would not be limited and may be approved for up to 3 years,
assuming the petition satisfies all other H-1B requirements. DHS
proposes limiting the first two validity periods to 18 months as a
safeguard against possible fraudulent petitions. While DHS sees a
significant advantage in promoting the H-1B program to entrepreneurs
and allowing these beneficiaries to perform a significant amount of
non-specialty occupation duties, unscrupulous petitioners might abuse
such provisions without sufficient guardrails. DHS believes that there
may be a cost to petitioners associated with this change however cannot
estimate how many petitioners may be affected by limiting the validity
period.
o. Site Visits
USCIS conducts inspections, evaluations, verifications, and
compliance reviews, to ensure that a petitioner and beneficiary are
eligible for the benefit sought and that all laws have been complied
with before and after approval of such benefits. These inspections,
verifications, and other compliance reviews may be conducted
telephonically or electronically, as well as through physical on-site
inspections (site visits). DHS is proposing to add regulations specific
to the H-1B program to codify its existing authority and clarify the
scope of inspections and the consequences of a petitioner's or third
party's refusal or failure to fully cooperate with these inspections.
Currently, site visit inspections are not mandatory for petitioners
filing Form I-129 on behalf of H-1B specialty occupation nonimmigrant
workers. Using its general authority, USCIS may conduct audits, on-site
inspections, reviews, or investigations to ensure that a beneficiary is
entitled to the benefits sought and that all laws have been complied
with before and after approval of such benefits.\201\ The authority to
conduct on-site inspection is critical to the integrity of the H-1B
program to detect and deter fraud and noncompliance.
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\201\ See INA section 103 and 8 CFR 2.1. As stated in subsection
V.A.5.ii(d) of this analysis, regulation would also clarify the
possible scope of an inspection, which may include the petitioning
organization's headquarters, satellite locations, or the location
where the beneficiary works or will work, including third-party
worksites, as applicable.

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[[Page 72944]]

In July 2009, USCIS started the Administrative Site Visit and
Verification Program \202\ as an additional method to verify
information in certain visa petitions under scrutiny. Under this
program, FDNS officers are authorized to make unannounced site visits
to collect information as part of a compliance review, which verifies
whether petitioners and beneficiaries are following the immigration
laws and regulations that are applicable in a particular case. This
process includes researching information in government databases,
reviewing public records and evidence accompanying the petition,
interviewing the petitioner or beneficiary, and conducting site visits.
Once the FDNS officers complete the site visit, they write a Compliance
Review Report for any indicators of fraud or noncompliance to assist
USCIS in final adjudicative decisions.
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\202\ See USCIS, ``Administrative Site Visit and Verification
Program,'' https://www.uscis.gov/about-us/directorates-and-program-offices/fraud-detection-and-national-security/administrative-site-visit-and-verification-program (last visited Sept. 18, 2019). See
USCIS, ``Administrative Site Visit and Verification Program,''
https://www.uscis.gov/about-us/directorates-and-program-offices/fraud-detection-and-national-security/administrative-site-visit-and-verification-program (last visited Sept. 18, 2019). See USCIS,
``Administrative Site Visit and Verification Program,'' https://www.uscis.gov/about-us/directorates-and-program-offices/fraud-detection-and-national-security/administrative-site-visit-and-verification-program https://www.uscis.gov/about-us/directorates-and-program-offices/fraud-detection-and-national-security/administrative-site-visit-and-verification-program (last visited
Sept. 18, 2019).
---------------------------------------------------------------------------

The site visits conducted under USCIS's existent, general
authority, and thus part of the baseline against which this proposed
rule's impact should be measured, have uncovered a significant amount
of noncompliance in the H-1B program.\203\ Further, when disaggregated
by worksite location, the noncompliance rate was found to be higher for
workers placed at an off-site or third-party location compared to
workers placed at a petitioner's on-site location.\204\ As a result,
USCIS began conducting more targeted site visits related to the H-1B
program, focusing on the cases of H-1B dependent employers (i.e.,
employers who have a high ratio of H-1B workers compared to U.S.
workers, as defined by statute) for whom USCIS cannot validate the
employer's basic business information through commercially available
data, and on employers petitioning for H-1B workers who work off-site
at another company or organization's location.
---------------------------------------------------------------------------

\203\ USCIS, Office of Policy and Strategy, PRD, Summary of H-1B
Site Visits Data.
\204\ Id.
---------------------------------------------------------------------------

DHS believes that site visits are important to maintain the
integrity of the H-1B program to detect and deter fraud and
noncompliance in the H-1B program, which in turn ensures the
appropriate use of the H-1B program and the protection of the interests
of U.S. workers. These site visits would continue in the absence of
this proposed rule and DHS notes that current Form I-129 instructions
notify petitioners of USCIS' legal authority to verify information
before or after a case decision, including by means of unannounced
physical site inspection. Hence, DHS is proposing additional
requirements specific to the H-1B program to set forth the scope of on-
site inspections, and the consequences of a petitioner's or third
party's refusal or failure to fully cooperate with existing
inspections. DHS does not foresee the rule leading to more on-site
inspections.
This proposed rule would provide a clear disincentive for
petitioners that do not cooperate with compliance reviews and
inspections while giving USCIS greater authority to access and confirm
information about employers and workers as well as identify fraud.
The proposed regulations would make clear that inspections may
include, but are not limited to, an on-site visit of the petitioning
organization'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 USCIS may lawfully obtain and that it considers pertinent
to verify facts related to the adjudication of the petition, such as
facts relating to the petitioner's and beneficiary's eligibility and
continued compliance with the requirements of the H-1B program. See
proposed 8 CFR 214.2(h)(4)(i)(B)(2). The proposed regulation would also
clarify that an inspection may take place at the petitioning
organization's headquarters, satellite locations, or the location where
the beneficiary works or will work, including third-party worksites, as
applicable. The proposed provisions would make clear that an H-1B
petitioner or any employer must allow access to all sites where the
labor will be performed for the purpose of determining compliance with
applicable H-1B requirements. The proposed regulation would state the
consequences if USCIS is unable to verify facts related to an H-1B
petition due to the failure or refusal of the petitioner or a third-
party worksite to cooperate with a site visit. These failures or
refusals may be grounds for denial or revocation of any H-1B petition
related to locations that are a subject of inspection, including any
third-party worksites. See proposed 8 CFR 214.2(h)(4)(i)(B)(2).
In order to estimate the population impacted by site visits, DHS
uses site inspection data used to verify facts pertaining to the H-1B
petition adjudication process. The site inspections were conducted at
H-1B petitioners' on-site locations and third-party worksites during FY
2018 through FY 2022. For instance, from FY 2019 through FY 2022, USCIS
conducted a total of 27,062 H-1B compliance reviews and found 5,037 of
them, equal to 19 percent, to be noncompliant or indicative of
fraud.\205\ These compliance reviews (from FY 2019 through FY 2022)
consisted of reviews conducted under both the Administrative Site Visit
and Verification Program and the Targeted Site Visit and Verification
Program, which began in 2017. The targeted site visit program allows
USCIS to focus resources where fraud and abuse of the H-1B program may
be more likely to occur.\206\
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\205\ DHS, USCIS, PRD (2022). PRD196. USCIS conducted these site
visits through its Administrative and Targeted Site Visit Programs.
\206\ See USCIS, ``Putting American Workers First: USCIS
Announces Further Measures to Detect H-1B Visa Fraud and Abuse,''
(April 3, 2017), https://www.uscis.gov/archive/putting-american-workers-first-uscis-announces-further-measures-to-detect-h-1b-visa-fraud-and-abuse.
---------------------------------------------------------------------------

Table 42 shows the number of H-1B worksite inspections conducted
each year and the number of visits that resulted in compliance and
noncompliance. USCIS received a low of 1,057 fraudulent/noncompliant
cases in FY 2022, and a high of 1,469 fraudulent/noncompliant cases in
FY 2021. DHS estimates that, on average, USCIS conducted 6,766 H-1B
worksite inspections annually from FY 2019 through FY 2022 and of those
DHS finds a noncompliance rate of 19 percent. Assuming USCIS continues
worksite inspections at the 4-year annual average rate, the population
impacted by this proposed provision would be 1,259 or 19 percent of H-
1B petitioners visited who are found noncompliant or indicative of
fraud. The outcomes of site visits under the proposed rule are
indeterminate as currently noncooperative petitioners might be found to
be fully compliant, might continue to not cooperate with site visits
despite penalties, or might be forced to reveal fraudulent practices to
USCIS. The expected increase in cooperation from current levels would
be the most important impact of the proposed provision, which DHS
discusses below. DHS notes that the increased cooperation might come
disproportionately from site visits of third-party worksites that did
not sign Form I-129 attesting to permit

[[Page 72945]]

unannounced physical site inspections of residences and places of
employment by USCIS.
[GRAPHIC] [TIFF OMITTED] TP23OC23.058

Table 43 shows the average duration of time to complete each
inspection was 1.08 hours. Therefore, DHS assumes that USCIS would
continue to conduct the same number of annual worksite inspections
(7,252), on average, and that the average duration of time for a USCIS
immigration officer to conduct each worksite inspection would be an
average of 1.08 hours. The data in Table 42 and Table 43 differ
slightly based on the different search criteria, pull dates and systems
accessed. DHS also assumes that the average duration of time of 1.08
hours to conduct an inspection covers the entire inspection process,
which includes interviewing the beneficiary, the on-site supervisor or
manager and other workers, as applicable, and reviewing all records
pertinent to the H-1B petitions available to USCIS when requested
during inspection.
[GRAPHIC] [TIFF OMITTED] TP23OC23.059

DHS assumes that a supervisor or manager, in addition to the
beneficiary, would be present on behalf of a petitioner while a USCIS
immigration officer conducts the worksite inspection. The officer would
interview the beneficiary to verify the date employment started, work
location, hours, salary, and duties performed to corroborate with the
information provided in an approved petition. The supervisor or manager
would be the most qualified employee at the location who could answer
all questions pertinent to the petitioning organization and its H-1B
nonimmigrant workers. They would also be able to provide the proper
records available to USCIS immigration officers. Consequently, for the
purposes of this economic analysis, DHS assumes that on average two
individuals would be interviewed during each worksite inspection: the
beneficiary and the supervisor or manager. DHS uses their respective
compensation rates in the estimation of the worksite inspection
costs.\207\ However, if any other worker or on-site manager is
interviewed, the same compensation rates would apply.
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\207\ DHS does not estimate any other USCIS costs associated
with the worksite inspections (i.e., travel and deskwork relating to
other research, review and document write up) here because these
costs are covered by fees collected from petitioners filing Form I-
129 for H-1B petitions. All such costs are reported under the
Federal Government Cost section.
---------------------------------------------------------------------------

DHS uses hourly compensation rates to estimate the opportunity cost
of time a beneficiary and supervisor or manager would incur during
worksite inspections. Based on data obtained from a USCIS report in
2022, DHS estimates that an H-1B worker earned an average of $116,000
per year in FY 2021.\208\ DHS therefore estimates the salary of an H-1B
worker is

[[Page 72946]]

approximately $116,000 annually, or $55.77 hourly wage.\209\ The annual
salary does not include noncash compensation and benefits, such as
health insurance and transportation. DHS adjusts the average hourly
wage rate using a benefits-to-wage multiplier to estimate the average
hourly compensation of $ 80.87 for an H-1B nonimmigrant worker.\210\ In
order to estimate the opportunity cost of time they would incur during
a worksite inspection, DHS uses an average hourly compensation rate of
$91.47 per hour for a supervisor or manager, where the average hourly
wage is $63.08 per hour worked and average benefits are $28.39.\211\
While the average duration of time to conduct an inspection is
estimated at 1.08 hours in this analysis, DHS is not able to estimate
the average duration of time for a USCIS immigration officer to conduct
an interview with a beneficiary or supervisor or manager. In the
absence of this information, DHS assumes that it would on average take
0.54 hours to interview a beneficiary and 0.54 hours to interview a
supervisor or manager.\212\
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\208\ This is the annual average earning of all H-1B
nonimmigrant workers in all industries with known occupations
(excluding industries with unknown occupations) for FY 2021. It is
what employers agreed to pay the nonimmigrant workers at the time
the applications were filed and estimated based on full-time
employment for 12 months, even if the nonimmigrant worker worked
fewer than 12 months. USCIS, ``Characteristics of H-1B Specialty
Occupation Workers, Fiscal Year 2021 Annual Report to Congress,
October 1, 2020-September 30, 2021,'' at 16, Table 9a (Mar. 2,
2022), https://www.uscis.gov/sites/default/files/document/data/H1B_Characteristics_Congressional_Report_FY2021-3.2.22.pdf.
\209\ The hourly wage is estimated by diving the annual salary
by the total number of hours worked in a year (2,080, which is 40
hours of full-time workweek for 52 weeks). $55.77 hourly wage =
$116,000 annual pay / 2,080 annual work hours. According to DOL that
certifies the LCA of the H-1B worker, a full-time H-1B employee
works 40 hours per week for 52 weeks for a total of 2,080 hours in a
year assuming full-time work is 40 hours per week. DOL, Wage and
hour Division: ``Fact Sheet #68--What Constitutes a Full-Time
Employee Under H-1B Visa Program? '' (July 2009), https://www.dol.gov/whd/regs/compliance/whdfs68.htm (Last visited July 30,
2019).
\210\ Hourly compensation of $ 80.87 = $55.77 average hourly
wage rate for H-1B worker x 1.45 benefits-to-wage multiplier. See
section V.A.5. for estimation of the benefits-to-wage multiplier.
\211\ Hourly compensation of $91.47 = $63.08 average hourly wage
rate for Management Occupations (national) x 1.45 benefits-to-wage
multiplier. See BLS, ``Occupational Employment and Wage Statistics,
Occupational Employment and Wages, May 2022, 11-0000 Management
Occupations (Major Group),'' https://www.bls.gov/oes/2022/may/oes110000.htm (last visited May 11, 2023).
\212\ DHS assumes that beneficiary takes 50 percent of average
inspection duration and supervisor or manager takes 50 percent.
Average duration of interview hours for beneficiaries (0.54) =
Average inspection duration (1.08) x 50% = 0.54 (rounded). Average
duration of interview hours for Supervisors or managers (0.54) =
Average inspection duration (1.08) x 50% = 0.54 (rounded).
---------------------------------------------------------------------------

In Table 44, DHS estimates the total annual opportunity cost of
time for worksite inspections of H-1B petitions by multiplying the
average annual number of worksite inspections (7,252) by the average
duration the interview would take for a beneficiary or supervisor or
manager and their respective compensation rates. DHS obtains the total
annual cost of the H-1B worksite inspections to be $674,881 for this
proposed rule.
[GRAPHIC] [TIFF OMITTED] TP23OC23.060

This proposed change may affect employers who do not cooperate with
site visits who would face denial or revocation of their petition(s),
which could result in costs to those businesses. Petitioners may face
financial losses because they may lose access to labor for extended
periods, which could result in too few workers, loss of revenue, and
some could go out of business. DHS expects program participants to
comply with program requirements, however, and notes that those that do
not could experience significant impacts due to this proposed rule. DHS
expects that the proposed rule would hold certain petitioners more
accountable for violations, including certain findings of labor law and
other violations, and would prevent registrations with false
information from taking a cap number for which they are ineligible.
p. Third-Party Placement (Codifying Defensor)
In this proposed provision, in certain circumstances USCIS would
look at the third party's requirements for the beneficiary's position,
rather than the petitioner's stated requirements, in assessing whether
the proffered position qualifies as a specialty occupation.
As required by both INA section 214(i)(1) and 8 CFR
214.2(h)(4)(i)(A)(1), an H-1B petition for a specialty occupation
worker must demonstrate that the worker will perform services in a
specialty occupation, which requires theoretical and practical
application of a body of highly specialized knowledge and attainment of
a baccalaureate or higher degree in the specific specialty (or its
equivalent) as a minimum requirement for entry into the occupation in
the United States. This proposal would ensure that petitioners are not
circumventing specialty occupation requirements by imposing token
requirements or requirements that are not normal to the third party.
Specifically, under proposed 8 CFR 214.2(h)(4)(i)(B)(3), if the
beneficiary will be staffed to a third party, meaning they will be
contracted to fill a position in a third party's organization, the
actual work to be performed by the beneficiary must be in a specialty
occupation. Therefore, it is the requirements of that third party, and
not the petitioner, that are most relevant when determining whether the
position is a specialty occupation. Relative to the no action baseline,
this change has no costs associated with it, and there may

[[Page 72947]]

be transparency benefits due to this proposed change. Relative to the
pre policy baseline petitioners may have taken time to demonstrate that
the worker will perform services in a specialty occupation, which
requires theoretical and practical application of a body of highly
specialized knowledge and attainment of a baccalaureate or higher
degree in the specific specialty. Because this has been in place for a
long time, DHS cannot estimate how much time it would have taken for
petitioners to provide that information.

q. Additional Time Burden for Form I-129 H-1B

DHS estimates the current public reporting time burden is 2 hours
and 20 minutes (2.34 hours), which includes the time for reviewing
instructions, gathering the required documentation and information,
completing the petition, preparing statements, attaching necessary
documentation, and submitting the petition.\213\ This proposed rule
would increase the burden per response by 5 minutes. Table 45 shows the
total receipts received for Form I-129 H-1B \214\ for FY 2018 through
FY 2022. The table also details the number of Form I-129 H-1B receipts
filed with an attorney or accredited representative using Form G-28.
The number of Form G-28 submissions allows USCIS to estimate the number
of Form I-129 H-1B that are filed by an attorney or accredited
representative and thus estimate the opportunity costs of time for a
petitioner, attorney, or accredited representative to file each form.
USCIS received a low of 319,090 H-1B receipts filed with Form G-28 in
FY 2021, and a high of 383,737, H-1B receipts filed with Form G-28 in
FY 2022. Based on a 5-year annual average, DHS estimates the annual
average receipts of Form I-129 to be 338,850 with 79 percent of
petitions filed by an attorney or accredited representative.
---------------------------------------------------------------------------

\213\ See Instructions for Petition for a Nonimmigrant Worker
(time burden estimate in the Paperwork Reduction Act section). Form
I-129 H-1B, https://www.uscis.gov/sites/default/files/document/forms/i-129.pdf. OMB No. 1615-1615-0009. Expires Nov. 30, 2025. The
public reporting burden for this collection of information is
estimated at 2 hours and 20 minutes (2.34 hours) per response.
\214\ The term ``Form I-129 H-1B'' refers to a Form I-129 that
is filed for H-1B classification.
[GRAPHIC] [TIFF OMITTED] TP23OC23.061

In order to estimate the opportunity costs of time for completing
and filing Form I-129 H-1B, DHS assumes that a petitioner will use an
HR specialist, an in-house lawyer, or an outsourced lawyer to prepare
Form I-129 H-1B petitions.\215\ DHS uses the mean hourly wage of $35.13
for HR specialists to estimate the opportunity cost of the time for
preparing and submitting Form I-129 H-1B.\216\ Additionally, DHS uses
the mean hourly wage of $78.74 for in-house lawyers to estimate the
opportunity cost of the time for preparing and submitting Form I-129 H-
1B.\217\
---------------------------------------------------------------------------

\215\ USCIS limited its analysis to HR specialists, in-house
lawyers, and outsourced lawyers to present estimated costs. However,
USCIS understands that not all entities employ individuals with
these occupations and, therefore, recognizes equivalent occupations
may also prepare and file these petitions.
\216\ See BLS, ``Occupational Employment and Wage Statistics,
Occupational Employment and Wages, May 2022, 13-1071 Human Resources
Specialists,'' https://www.bls.gov/oes/2022/may/oes131071.htm (last
visited May 11, 2023).
\217\ See BLS, ``Occupational Employment and Wage Statistics,
Occupational Employment and Wages, May 2022, 23-1011 Lawyers,''
https://www.bls.gov/oes/2022/may/oes231011.htm (last visited May.
11, 2023).
---------------------------------------------------------------------------

DHS accounts for worker benefits when estimating the total costs of
compensation by calculating a benefits-to-wage multiplier using the BLS
report detailing the average employer costs for employee compensation
for all civilian workers in major occupational groups and industries.
DHS estimates that the benefits-to-wage multiplier is 1.45 and,
therefore, is able to estimate the full opportunity cost per
petitioner, including employee wages and salaries and the full cost of
benefits such as paid leave, insurance, retirement, etc.\218\ DHS
multiplied the average hourly U.S. wage rate for HR specialists and in-
house lawyers by 1.45 to account for the full cost of employee
benefits, for a total of $50.94 \219\ per hour for an HR specialist and
$114.17 \220\ per hour for an in-house lawyer. DHS recognizes that a
firm may choose, but is not required, to outsource the preparation of
these petitions and, therefore, presents two wage rates for lawyers. To
determine the full opportunity costs of time if a firm hired an
outsourced lawyer, DHS multiplied the average hourly U.S. wage rate for
lawyers by 2.5 for a total of $196.85 \221\ to approximate an hourly
wage rate for

[[Page 72948]]

an outsourced lawyer \222\ to prepare and submit Form I-129 H-1B.\223\
---------------------------------------------------------------------------

\218\ The benefits-to-wage multiplier is calculated as follows:
(Total Employee Compensation per hour)/(Wages and Salaries per hour)
($42.48 Total Employee Compensation per hour)/($29.32 Wages and
Salaries per hour) = 1.44884 = 1.45 (rounded). See BLS, Economic
News Release, ``Employer Costs for Employee Compensation--December
2022,'' Table 1. ``Employer Costs for Employee Compensation by
ownership [Dec. 2022],'' https://www.bls.gov/news.release/archives/ecec_03172023.htm (last visited Mar. 21, 2023). The Employer Costs
for Employee Compensation measures the average cost to employers for
wages and salaries and benefits per employee hour worked.
\219\ Calculation: $35.13 * 1.45 = $50.94 total wage rate for HR
specialist.
\220\ Calculation: $78.74 * 1.45 = $114.17 total wage rate for
in-house lawyer.
\221\ Calculation: $78.74 * 2.5 = $196.85 total wage rate for an
outsourced lawyer.
\222\ The DHS analysis in ``Exercise of Time-Limited Authority
To Increase the Fiscal Year 2018 Numerical Limitation for the H-2B
Temporary Nonagricultural Worker Program,'' 83 FR 24905 (May 31,
2018), https://www.federalregister.gov/documents/2018/05/31/2018-11732/exercise-of-time-limited-authority-to-increase-the-fiscal-year-2018-numerical-limitation-for-the, used a multiplier of 2.5 to
convert in-house attorney wages to the cost of outsourced attorney
wages.
The DHS ICE rule ``Final Small Entity Impact Analysis: `Safe-
Harbor Procedures for Employers Who Receive a No-Match Letter' '' at
G-4 (Aug. 25, 2008), https://www.regulations.gov/document/ICEB-2006-0004-0922, also uses a multiplier. The methodology used in the Final
Small Entity Impact Analysis remains sound for using 2.5 as a
multiplier for outsourced labor wages in this proposed rule.
\223\ The DHS analysis in ``Exercise of Time-Limited Authority
To Increase the Fiscal Year 2018 Numerical Limitation for the H-2B
Temporary Nonagricultural Worker Program,'' 83 FR 24905 (May 31,
2018), https://www.federalregister.gov/documents/2018/05/31/2018-11732/exercise-of-time-limited-authority-to-increase-the-fiscal-year-2018-numerical-limitation-for-the, used a multiplier of 2.5 to
convert in-house attorney wages to the cost of outsourced attorney
wages.
Also, the analysis for a DHS ICE rule, ``Final Small Entity
Impact Analysis: `Safe-Harbor Procedures for Employers Who Receive a
No-Match Letter' '' at G-4 (Aug. 25, 2008), https://www.regulations.gov/document/ICEB-2006-0004-0922, used a multiplier.
The methodology used in the Final Small Entity Impact Analysis
remains sound for using 2.5 as a multiplier for outsourced labor
wages in this proposed rule.
---------------------------------------------------------------------------

To estimate the opportunity cost of time to complete and file Form
I-129 H-1B, DHS applies the estimated time burden (2.34 hours) to the
eligible population and compensation rates of those who may file with
or without a lawyer.\224\ Table 46 shows the estimated annual
opportunity cost of time for Form I-129 H-1B petitioners employing an
in-house or outsourced lawyer to complete and file Form I-129 H-1B
petitions. DHS does not know the exact number of petitioners who will
choose an in-house or an outsourced lawyer but assumes it may be a 50/
50 split and therefore provides an average. DHS estimates that these
current opportunity costs of time for Form I-129 H-1B petitioners using
an attorney or other representative range from $90,526,421 to
$156,084,137 with an annual average of $123,305,279.
---------------------------------------------------------------------------

\224\ See ``Instructions for Petition for a Nonimmigrant
Worker,'' Form I-129, OMB No. 1615-0009, expires Nov. 30, 2025,
https://www.uscis.gov/sites/default/files/document/forms/i-129instr.pdf (last visited Nov. 3, 2022).
---------------------------------------------------------------------------

BILLING CODE 9111-97-P
[GRAPHIC] [TIFF OMITTED] TP23OC23.062

To estimate the current remaining opportunity cost of time for an
HR specialist filing Form I-129 H-1B without a lawyer, DHS applies the
estimated public reporting time burden (2.34 hours) to the compensation
rate of an HR specialist. Table 47 estimates the current total annual
opportunity cost of time to HR specialists completing and filing I-129
H-1B requests will be approximately $10,605,427.
[GRAPHIC] [TIFF OMITTED] TP23OC23.063

Table 48 shows the proposed estimated time burden (2.42 hours) to
the eligible population and compensation rates of those who may file
with or without a lawyer. DHS does not know the exact number of
petitioners who will choose an in-house or an outsourced lawyer but
assumes it may be a 50/50 split and therefore provides an average.
These current opportunity costs of time for Form I-129 H-1B petitioners
using an attorney or other representative are estimated to range from
$93,621,341 to $161,420,346 with an annual average of $127,520,844.

[[Page 72949]]

[GRAPHIC] [TIFF OMITTED] TP23OC23.064

To estimate the current remaining opportunity cost of time for an
HR specialist filing Form I-129 H-1B without a lawyer, DHS applies the
estimated public reporting time burden (2.42 hours) to the compensation
rate of an HR specialist. Table 49 estimates the current total annual
opportunity cost of time to HR specialists completing and filing I-129
H-1B requests will be approximately $10,968,006.
[GRAPHIC] [TIFF OMITTED] TP23OC23.065

DHS estimates the total additional annual cost to petitioners
completing and filing Form I-129 H-1B are expected to be $4,578,144
shown in Table 50. This table shows the current total opportunity cost
of time to file Form I-129 H-1B and the proposed total opportunity cost
of time.
[GRAPHIC] [TIFF OMITTED] TP23OC23.066

Finally, many DHS rulemakings include monetized or unquantified
familiarization costs. This is appropriate when a likely consequence of
proposed regulations could be additional individuals seeking out and
consuming more specialized resources, such as immigration attorneys'
time in order to access the same benefits. This section has emphasized
that employers of H-1B beneficiaries already consume significant
specialized resources. In contrast to policies that impose additional
requirements upon petitioners and registrants, DHS believes the
proposed modernization, efficiencies, flexibilities and integrity
improvements have no likely consequence to current consumption of
specialized resources such as HR Specialists' time, in-house attorneys'

[[Page 72950]]

time, and even out-sourced attorneys time inclusive of indirect costs.
An assumption that hundreds of thousands will spend 4 or more hours
reading the entirety of this proposed rule, in addition to the 2.42
hour burden of Form I-129 H-1B, risks overrepresenting the interests of
immigration attorneys relative to the other impacts this Regulatory
Impact Analysis describes using supporting data and evidence. DHS
invites public comment on familiarization costs and how any such costs
should be accurately modeled.

r. Additional Time Burden for H Classification Supplement to Form I-129

DHS estimates the current public reporting time burden at 2 hours,
for the H Classification Supplement, which includes the time for
reviewing instructions, gathering the required documentation and
information, completing the petition, preparing statements, attaching
necessary documentation, and submitting the petition.\225\ This
proposed rule would strengthen program integrity by codifying the
authority to request contracts from petitioners. This change will
increase the burden per response 5 minutes.
---------------------------------------------------------------------------

\225\ See Instructions for Petition for a Nonimmigrant Worker
(time burden estimate in the Paperwork Reduction Act section). Form
I-129 H Classification Supplement, https://www.uscis.gov/sites/default/files/document/forms/i-129.pdf. OMB No. 1615-1615-0009.
Expires Nov. 30, 2025. The public reporting burden for this
collection of information is estimated at 2 hours (2.0 hours) per
response.
---------------------------------------------------------------------------

Table 51 shows the total receipts received for H-1B petitions for
FY 2018 through FY 2022. The table also shows the number of H-1B
petitions submitted by an attorney or accredited representative using
Form G-28. The number of Form G-28 submissions allows USCIS to estimate
the number of H-1B petitions that an attorney or accredited
representative submitted and thus estimate the opportunity costs of
time for an attorney or accredited representative to file each form
USCIS received a low of 398,285 of H-1B petitions in FY 2021, and a
high of 474,311 of H-1B petitions in FY 2022. Based on a 5-year annual
average, DHS estimates the annual average receipts of H-1B petitions to
be 338,850 with 79 percent of petitions filed by an attorney or
accredited representative.
[GRAPHIC] [TIFF OMITTED] TP23OC23.067

Table 52 shows the estimated annual opportunity cost of time for
submitting an H-1B petition employing an in-house or outsourced lawyer
to complete and submit an H-1B petition. DHS does not know the exact
number of petitioners who will choose an in-house or an outsourced
lawyer but assumes it may be a 50/50 split and therefore provides an
average. DHS estimates that these current annual opportunity costs of
time for filing an H-1B petition using an attorney or other
representative range from $77,373,009 to $133,405,245 with an average
of $105,389,127.
[GRAPHIC] [TIFF OMITTED] TP23OC23.068

To estimate the current remaining opportunity cost of time for an
HR specialist filing Form I-129 H-1B without a lawyer, DHS applies the
estimated public reporting time burden (2 hours) to the compensation
rate of an HR specialist. Table 53 estimates the current total annual
opportunity cost of time to HR specialists completing and

[[Page 72951]]

filing an H-1B petition will be approximately $9,064,467.
[GRAPHIC] [TIFF OMITTED] TP23OC23.069

Table 54 shows the proposed increased estimated time burden of 2
hours and 4 minutes (2.07 hours) to the eligible population and
compensation rates of those who may file with or without a lawyer. DHS
does not know the exact number of petitioners who will choose an in-
house or an outsourced lawyer but assumes it may be a 50/50 split and
therefore provides an average. DHS estimates that these current annual
opportunity costs of time for filing an H-1B petition using an attorney
or other representative range from $80,081,064 to $138,074,429 with an
average of $109,077,747.
[GRAPHIC] [TIFF OMITTED] TP23OC23.070

To estimate the current remaining opportunity cost of time for an
HR specialist filing Form I-129 H-1B without a lawyer, DHS applies the
estimated public reporting time burden (2.07 hours) to the compensation
rate of an HR specialist. Table 55 estimates the current total annual
opportunity cost of time to HR specialists completing and filing an H-
1B petition will be approximately $9,381,724.
[GRAPHIC] [TIFF OMITTED] TP23OC23.071

DHS estimates the total additional annual cost to petitioners
completing and filing Form I-129 H-1B are expected to be $4,005,877
shown in Table 56. This table shows the current total opportunity cost
of time to file an H-1B H Supplement and the proposed total opportunity
cost of time.

[[Page 72952]]

[GRAPHIC] [TIFF OMITTED] TP23OC23.072

4. Alternatives Considered
DHS considered the alternative of eliminating the registration
system and reverting to the paper-based filing system stakeholders used
prior to implementing registration. However, when DHS considered the
immense cost savings that registration provides to both USCIS and
stakeholders and the significant resources the agency would incur to
revert back to a paper-based H-1B cap selection process, the benefits
of having a registration system still outweigh the costs of potential
abuse of the system.
DHS is also seeking public comment on how to ensure that the
limited number of H-1B cap-subject visas, and new H-1B status grants
available each fiscal year are used for non-speculative job
opportunities. DHS is seeking public comments on the possible
approaches described in the preamble, as well as soliciting ideas that
would further curb or eliminate the possibility that petitioners may
have speculative job opportunities at the time of filing or approval of
H-1B petitions and delay admission of H-1B beneficiaries until they
have secured work for them.
5. Total Quantified Net Costs of the Proposed Regulatory Changes
In this section, DHS presents the total annual cost savings of this
proposed rule annualized over a 10-year period of analysis. Table 57
details the annual cost savings of this proposed rule. DHS estimates
the total cost savings is $5,920,408.
[GRAPHIC] [TIFF OMITTED] TP23OC23.073

DHS summarizes the annual costs of this proposed rule. Table 58
details the annual costs of this proposed rule. DHS estimates the total
cost is $12,260,187.
[GRAPHIC] [TIFF OMITTED] TP23OC23.074

[[Page 72953]]

Net costs to the public of $6,339,779 are the total costs minus
cost savings.\226\ Table 59 illustrates that over a 10-year period of
analysis from FY 2023 through FY 2032 annualized costs would be
$6,339,779 using 7-percent and 3-percent discount rates.
---------------------------------------------------------------------------

\226\ Calculations: $12,260,187 Total Costs-$5,920,217 Total
Cost Savings = $6,339,779 Net Costs.
[GRAPHIC] [TIFF OMITTED] TP23OC23.075

BILLING CODE 9111-97-C

B. Regulatory Flexibility Act (RFA)

1. Initial Regulatory Flexibility Analysis
The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601 and 602,
as amended by the Small Business Regulatory Enforcement Fairness Act of
1996, Public Law 104-121, requires Federal agencies to consider the
potential impact of regulations on small businesses, small governmental
jurisdictions, and small organizations during the development of their
rules. The term ``small entities'' comprises small businesses, not-for-
profit organizations that are independently owned and operated and are
not dominant in their fields, and governmental jurisdictions with
populations of less than 50,000.\227\
---------------------------------------------------------------------------

\227\ A small business is defined as any independently owned and
operated business not dominant in its field that qualifies as a
small business per the Small Business Act, 15 U.S.C. 632.
---------------------------------------------------------------------------

An ``individual'' is not considered a small entity and costs to an
individual are not considered a small entity impact for RFA purposes.
In addition, the courts have held that the RFA requires an agency to
perform a regulatory flexibility analysis of small entity impacts only
when a rule directly regulates small entities.\228\ Consequently,
indirect impacts from a rule on a small entity are not considered as
costs for RFA purposes.
---------------------------------------------------------------------------

\228\ See Small Business Administration, A Guide For Government
Agencies, How to Comply with the Regulatory Flexibility Act. https://advocacy.sba.gov/wp-content/uploads/2019/06/How-to-Comply-with-the-RFA.pdf (last visited Aug. 23 2023).
---------------------------------------------------------------------------

a. USCIS's RFA analysis for this proposed rule focuses on the
population of Form I-129 petitions for H-1B workers. Where cost savings
occur from multiple registrants no longer registering on behalf of a
common beneficiary, either deliberately or inadvertently, USCIS is
unable to quantify the portion of potential cost savings accruing to
small entities. Some of these cost savings may be partially offset by
the advantage multiple registrations conferred over single, unique
registrants, but it is ambiguous whether such small entities enjoy this
advantage or feel increasingly compelled to do this by their belief
that other lottery competitors are doing so. A Description of the
Reasons Why the Action by the Agency Is Being Considered
The purpose of this rulemaking is to modernize and improve the
regulations relating to the H-1B program by: (1) streamlining the
requirements of the H-1B program; (2) improving program efficiency; (3)
providing greater flexibility for petitioners and beneficiaries; and
(4) improving integrity measures.
b. A Statement of the Objectives of, and Legal Basis for, the Proposed
Rule
DHS's objectives and legal authority for this proposed rule are
discussed earlier in the preamble.
c. A Description and, Where Feasible, an Estimate of the Number of
Small Entities to Which the Proposed Changes Would Apply
For this analysis, DHS conducted a sample analysis of historical
Form I-129 H-1B petitions to estimate the number of small entities
impacted by this proposed rule. DHS utilized a subscription-based
electronic database of U.S. entities, ReferenceUSA, as well as three
other open-access, free databases of public and private entities,
Manta, Cortera, and Guidestar to determine the North American Industry
Classification System (NAICS) code, revenue, and employee count for
each entity. To determine whether an entity is small for purposes of
RFA, DHS first classified the entity by its NAICS code and then used
Small Business Administration (SBA) guidelines to classify the revenue
or employee count threshold for each entity. Some entities were
classified as small based on their annual revenue, and some by their
numbers of employees.
Using FY 2022 internal data on actual filings of Form I-129 H-1B
petitions, DHS identified 44,593 unique entities. DHS devised a
methodology to conduct the small entity analysis based on a
representative, random sample of the potentially impacted population.
DHS first determined the minimum sample size necessary to achieve a 95-
percent

[[Page 72954]]

confidence level confidence interval estimation for the impacted
population of entities using the standard statistical formula at a 5-
percent margin of error. DHS then created a sample size greater than
the minimum necessary to increase the likelihood that our matches would
meet or exceed the minimum required sample.
DHS randomly selected a sample of 3,396 entities from the
population of 44,593 entities that filed Form I-129 for H-1B petitions
in FY 2022. Of the 3,396 entities, 1,724 entities returned a successful
match of a filing entity in the ReferenceUSA, Manta, Cortera, and
Guidestar databases; 1,672 entities did not return a match. Using these
databases' revenue or employee count and their assigned NAICS code, DHS
determined 1,209 of the 1,724 matches to be small entities, 515 to be
non-small entities. DHS assumes filing entities without database
matches or missing revenue/employee count data are likely to be small
entities. As a result, in order to prevent underestimating the number
of small entities this proposed rule would affect, DHS considers all
the non-matched and missing entities as small entities for the purpose
of this analysis. Therefore, DHS classifies 2,881 of 3,396 entities as
small entities, including combined non-matches (1,672), and small
entity matches (1,209). Thus, DHS estimates that 84.8 percent (2,881 of
3,396) of the entities filing Form I-129 H-1B petitions are small
entities.
In this analysis DHS assumes that the distribution of firm size for
our sample is the same as the entire population of Form I-129 H-1B
petitioners. Thus, DHS estimates the number of small entities to be
84.8 percent of the population of 44,593 entities that filed Form I-129
under the H-1B classification, as summarized in Table 60 below. The
annual numeric estimate of the small entities impacted by this proposed
rule is 37,815 entities.\229\
---------------------------------------------------------------------------

\229\ The annual numeric estimate of the small entities (37,815)
= Population (44,593) * Percentage of small entities (84.8%).
[GRAPHIC] [TIFF OMITTED] TP23OC23.076

It should be acknowledged here that DHS's sample frame excludes H-2
petitioners identified by the RIA as benefitting from the proposal to
no longer require itineraries, because this requirement has no adverse
impacts to small entities and DHS has not identified opportunities to
further enhance this benefit to small entities. Similarly, the proposal
to codify deference has no adverse impacts to small entities.
Additionally, while the proposed clarity for evidence of maintenance of
status may indirectly impact small entities filing such petitions and
applications, the costs and benefits fall predominantly and more
directly upon the individuals.
Following the distributional assumptions above, DHS uses the set of
1,209 small entities with matched revenue data to estimate the economic
impact of the proposed rule on each small entity. The economic impact,
in percentage, for each small entity is the sum of the impacts of the
proposed changes divided by the entity's sales revenue.\230\ DHS
constructed the distribution of economic impact of the proposed rule
based on the sample of 1,209 small entities. USCIS multiplied the
proposed increase in cost per petition by the number of petitions filed
by a small entity in FY22 to estimate the increase in cost to that
small entity. USCIS then divided the increase in cost to that small
entity by the annual revenue generated by that small entity. The
average number of petitions filed per small entity was 10.3.
Consequently, the average quantified increase per small entity was
$152.43. Based on FY 2022 revenue, of the 1,209 small entities, 0
percent (0 small entities) would experience a cost increase that is
greater than 1 percent of revenues.
---------------------------------------------------------------------------

\230\ The economic impact, in percentage, for each small entity
i = ((Cost of one petition for entity i x Number of petitions for
entity i)/Entity i's sales revenue) x 100.
The cost of one petition for entity i ($14.82) is estimated by
dividing the total cost of this proposed rule by the estimated
population. $6,339,779/427,822 = $14.82.
The entity's sales revenue is taken from ReferenceUSA, Manta,
Cortera, and Guidestar databases.
---------------------------------------------------------------------------

In addition to the quantitated costs to small entities, employers
who do not cooperate with site visits who would face denial or
revocation of their petition(s), which could result in costs to those
businesses.
d. A Description of the Projected Reporting, Recordkeeping, and Other
Compliance Requirements of the Proposed Rule, Including an Estimate of
the Classes of Small Entities That Will Be Subject to the Requirement
and the Types of Professional Skills
The proposed beneficiary-centric selection process would result in
additional burden to employers reporting beneficiaries' passport
information in the registration system, on Form I-129 H-1B petition and
on H Classification Supplement to Form I-129. DHS estimates increase
for each of these respective burdens is 5 minutes.
e. An Identification of All Relevant Federal Rules, to the Extent
Practical, That May Duplicate, Overlap, or Conflict With the Proposed
Rule
DHS is unaware of any duplicative, overlapping, or conflicting
Federal rules, but invites any comment and information regarding any
such rules.
f. A Description of Any Significant Alternatives to the Proposed Rule
That Accomplish the Stated Objectives of Applicable Statutes and That
Minimize Any Significant Economic Impact of the Proposed Rule on Small
Entities
With respect to beneficiary-centric lottery, there are no burdens
to be minimized. While collection of passport information imposes some
burden to prospective employers, USCIS found no other alternatives that
achieved stated objectives with less burden to small entities.

C. Unfunded Mandates Reform Act of 1995 (UMRA)

The Unfunded Mandates Reform Act of 1995 (UMRA) is intended, among
other things, to curb the practice of imposing unfunded Federal
mandates on State, local, and tribal governments. Title II of UMRA
requires each Federal agency to prepare a written statement assessing
the effects of any Federal mandate in a proposed rule, or final rule
for which the agency published a

[[Page 72955]]

proposed rule, that includes any Federal mandate that may result in a
$100 million or more expenditure (adjusted annually for inflation) in
any one year by State, local, and tribal governments, in the aggregate,
or by the private sector.\231\
---------------------------------------------------------------------------

\231\ See 2 U.S.C. 1532(a).
---------------------------------------------------------------------------

In addition, the inflation-adjusted value of $100 million in 1995
is approximately $192 million in 2022 based on the Consumer Price Index
for All Urban Consumers (CPI-U).\232\ This proposed rule does not
contain a Federal mandate as the term is defined under UMRA.\233\ The
requirements of title II of UMRA, therefore, do not apply, and DHS has
not prepared a statement under UMRA.
---------------------------------------------------------------------------

\232\ See BLS, ``Historical Consumer Price Index for All Urban
Consumers (CPI-U): U.S. city average, all items, by month,''
www.bls.gov/cpi/tables/supplemental-files/historical-cpi-u-202212.pdf (last visited Jan. 19, 2023). Calculation of inflation:
(1) Calculate the average monthly CPI-U for the reference year
(1995) and the current year (2022); (2) Subtract reference year CPI-
U from current year CPI-U; (3) Divide the difference of the
reference year CPI-U and current year CPI-U by the reference year
CPI-U; (4) Multiply by 100 = [(Average monthly CPI-U for 2022 -
Average monthly CPI-U for 1995)/(Average monthly CPI-U for
1995)]*100=[(292.655-152.383)/152.383]*100=(140.272/
152.383)*100=0.92052263*100=92.05 percent = 92 percent (rounded).
Calculation of inflation-adjusted value: $100 million in 1995
dollars*1.92=$192 million in 2022 dollars.
\233\ The term ``Federal mandate'' means a Federal
intergovernmental mandate or a Federal private sector mandate. See 2
U.S.C. 1502(1), 658(6).
---------------------------------------------------------------------------

D. Executive Order 13132 (Federalism)

This proposed rule would not have substantial direct effects on the
States, on the relationship between the National Government and the
States, or on the distribution of power and responsibilities among the
various levels of government. Therefore, in accordance with section 6
of Executive Order 13132, it is determined that this proposed rule does
not have sufficient federalism implications to warrant the preparation
of a federalism summary impact statement.

E. Executive Order 12988: Civil Justice Reform

This proposed rule was drafted and reviewed in accordance with E.O.
12988, Civil Justice Reform. This proposed rule was written to provide
a clear legal standard for affected conduct and was carefully reviewed
to eliminate drafting errors and ambiguities, so as to minimize
litigation and undue burden on the Federal court system. DHS has
determined that this proposed rule meets the applicable standards
provided in section 3 of E.O. 12988.

F. Executive Order 13175 (Consultation and Coordination With Indian
Tribal Governments)

This proposed rule does not have ``tribal implications'' because,
if finalized, it would not have substantial direct effects on one or
more Indian Tribes, on the relationship between the Federal Government
and Indian Tribes, or on the distribution of power and responsibilities
between the Federal Government and Indian Tribes. Accordingly, E.O.
13175, Consultation and Coordination with Indian Tribal Governments,
requires no further agency action or analysis.

G. National Environmental Policy Act (NEPA)

DHS and its components analyze proposed actions to determine
whether the National Environmental Policy Act (NEPA) \234\ applies to
them and, if so, what degree of analysis is required. DHS Directive
023-01, Rev. 01 (Directive) and Instruction Manual 023-01-001-01, Rev.
01 (Instruction Manual) \235\ establish the procedures DHS and its
components use to comply with NEPA and the Council on Environmental
Quality (CEQ) regulations for implementing NEPA.\236\ The CEQ
regulations allow Federal agencies to establish in their NEPA
implementing procedures categories of actions (``categorical
exclusions'') that experience has shown normally do not individually or
cumulatively have a significant effect on the human environment and,
therefore, do not require preparation of an Environmental Assessment or
Environmental Impact Statement.\237\ Instruction Manual, Appendix A,
Table 1 lists the DHS categorical exclusions.
---------------------------------------------------------------------------

\234\ See Public Law 91-190, 42 U.S.C. 4321 through 4347.
\235\ See DHS, ``Implementing the National Environmental Policy
Act,'' DHS Directive 023-01, Rev 01 (Oct. 31, 2014), and DHS
Instruction Manual Rev. 01 (Nov. 6, 2014), https://www.dhs.gov/publication/directive-023-01-rev-01-and-instruction-manual-023-01-001-01-rev-01-and-catex.
\236\ See 40 CFR parts 1500 through 1508.
\237\ See 40 CFR 1501.4(a).
---------------------------------------------------------------------------

Under DHS NEPA implementing procedures, for an action to be
categorically excluded, it must satisfy each of the following three
conditions: (1) The entire action clearly fits within one or more of
the categorical exclusions; (2) the action is not a piece of a larger
action; and (3) no extraordinary circumstances exist that create the
potential for a significant environmental effect.\238\
---------------------------------------------------------------------------

\238\ See Instruction Manual, section V.B.2 (a-c).
---------------------------------------------------------------------------

As discussed throughout this preamble, this rulemaking includes a
number of proposed regulatory improvements affecting H-1B specialty
occupation workers, as well as a couple of provisions affecting other
nonimmigrant classifications, including: H-2, H-3, F-1, L-1, O, P, Q-1,
R-1, E-3, and TN. If finalized, this proposed rule is intended to
modernize and improve the efficiency of the H-1B program by: (1)
amending the definition of a ``specialty occupation'' and the specialty
occupation criteria; (2) clarifying when to file an amended petition;
(3) codifying deference given to prior USCIS determinations regarding
the petitioner's, beneficiary's, or applicant's eligibility, when
adjudicating certain extension requests (both H-1B and other
nonimmigrant classifications) involving the same parties and the same
underlying facts; (4) clarifying when a petitioner is required to
submit evidence of maintenance of status; (5) eliminating the itinerary
requirement for H nonimmigrant classifications; and (6) allowing H-1B
petitioners to amend requested validity periods when the validity
expires before adjudication. If finalized, this rulemaking will also
modernize exemptions from the H-1B cap, extend automatic ``cap-gap''
extensions, and codify start date flexibility for certain cap-subject
H-1B petitions. In addition, any final rule resulting from this NPRM
will improve program integrity by curbing abuse of the H-1B
registration process, including through beneficiary-centric selection;
codifying USCIS's authority to request contracts; requiring that the
petitioner establish that it will employ the beneficiary in a non-
speculative position in a specialty occupation; verifying that the LCA
corresponds with the petition; revising the definition of U.S.
employer; eliminating the employer-employee relationship requirement;
codifying the existing requirement that the petitioner have a bona fide
job offer for the beneficiary to work within the United States;
requiring that petitioners have a legal presence in the United States
and be amenable to service of process in the United States; clarifying
that beneficiary-owners may qualify for H-1B status; conducting site
visits; and codifying the requirement that the specialty occupation
determination be assessed based on the third party, rather than the
petitioner, if a beneficiary will be staffed to a third party.
DHS is not aware of any significant impact on the environment, or
any change in the environmental effect from

[[Page 72956]]

current H-1B and other impacted nonimmigrant program rules, that will
result from the proposed rule changes. DHS therefore finds this
proposed rule clearly fits within categorical exclusion A3 established
in the Department's implementing procedures.
The proposed amendments, if finalized, would be stand-alone rule
changes and are not a part of any larger action. In accordance with the
Instruction Manual, DHS finds no extraordinary circumstances associated
with the proposed rules that may give rise to significant environmental
effects requiring further environmental analysis and documentation.
Therefore, this action is categorically excluded and no further NEPA
analysis is required.

H. Paperwork Reduction Act

Under the Paperwork Reduction Act of 1995 (PRA), 44 U.S.C. 3501-12,
DHS must submit to OMB, for review and approval, any reporting
requirements inherent in a rule unless they are exempt.
DHS and USCIS invite the general public and other Federal agencies
to comment on the impact to the proposed collection of information. In
accordance with the PRA, the information collection notice is published
in the Federal Register to obtain comments regarding the proposed edits
to the information collection instrument.
Comments are encouraged and will be accepted for 60 days from the
publication date of the proposed rule. All submissions received must
include the agency name and OMB Control Number 1615-0144 and/or 1615-
0009 in the body of the letter. Please refer to the ADDRESSES and I.
Public Participation section of this proposed rule for instructions on
how to submit comments. Comments on this information collection should
address one or more of the following four points:
(1) Evaluate whether the collection of information is necessary for
the proper performance of the functions of the agency, including
whether the information will have practical utility;
(2) Evaluate the accuracy of the agency's estimate of the burden of
the collection of information, including the validity of the
methodology and assumptions used;
(3) Enhance the quality, utility, and clarity of the information to
be collected; and
(4) Minimize the burden of the collection of information on those
who are to respond, including through the use of appropriate automated,
electronic, mechanical, or other technological collection techniques or
other forms of information technology, e.g., permitting electronic
submission of responses.
H-1B Registration Tool (OMB Control No. 1615-0144)
(1) Type of Information Collection: Revision of a Currently
Approved Collection.
(2) Title of the Form/Collection: H-1B Registration Tool.
(3) Agency form number, if any, and the applicable component of DHS
sponsoring the collection: OMB-64; USCIS.
(4) Affected public who will be asked or required to respond, as
well as a brief abstract: Primary: Business or other for-profit. USCIS
uses the data collected on this form to determine which employers will
be informed that they may submit a USCIS Form I-129, Petition for
Nonimmigrant Worker, for H-1B classification.
(5) An estimate of the total number of respondents and the amount
of time estimated for an average respondent to respond: The estimated
total number of respondents for the information collection H-1B
Registration Tool (Businesses) is 20,950 and the estimated hour burden
per response is 0.6 hours. The estimated total number of respondents
for the information collection H-1B Registration Tool (Attorneys) is
19,339 and the estimated hour burden per response is 0.6 hours. The
total number of responses (355,590) is estimated by averaging the total
number of registrations received during the H-1B cap fiscal years 2021,
2022, and 2023.
(6) An estimate of the total public burden (in hours) associated
with the collection: The total estimated annual hour burden associated
with this collection of information is 213,354 hours.
(7) An estimate of the total public burden (in cost) associated
with the collection: The estimated total annual cost burden associated
with this collection of information is $0.
Form I-129 (OMB Control No. 1615-0009)
(1) Type of Information Collection: Revision of a Currently
Approved Collection.
(2) Title of the Form/Collection: Petition for Nonimmigrant Worker.
(3) Agency form number, if any, and the applicable component of DHS
sponsoring the collection: I-129, E-1/E-2 Classification Supplement,
Trade Agreement Supplement, H Classification Supplement, H-1B and H-1B1
Data Collection and Filing Exemption Supplement, L Classification
Supplement, O and P Classification Supplement, Q-1 Classification
Supplement, and R-1 Classification Supplement; USCIS.
(4) Affected public who will be asked or required to respond, as
well as a brief abstract: Primary: Business or other for-profit. USCIS
uses Form I-129 and accompanying supplements to determine whether the
petitioner and beneficiary(ies) is (are) eligible for the nonimmigrant
classification. A U.S. employer, or agent in some instances, may file a
petition for nonimmigrant worker to employ foreign nationals under the
following nonimmigrant classifications: H-1B, H-2A, H-2B, H-3, L-1, O-
1, O-2, P-1, P-2, P-3, P-1S, P-2S, P-3S, Q-1, or R-1 nonimmigrant
worker. The collection of this information is also required from a U.S.
employer on a petition for an extension of stay or change of status for
E-1, E-2, E-3, Free Trade H-1B1 Chile/Singapore nonimmigrants and TN
(USMCA workers) who are in the United States.
(5) An estimate of the total number of respondents and the amount
of time estimated for an average respondent to respond: The estimated
total number of respondents for the information collection I-129 is
294,751 and the estimated hour burden per response is 2.42 hours. The
estimated total number of respondents for the information collection E-
1/E-1 Classification Supplement is 4,760 and the estimated hour burden
per response is 0.67 hours. The estimated total number of respondents
for the information collection Trade Agreement Supplement is 3,057 and
the estimated hour burden per response is 0.67 hours. The estimated
total number of respondents for the information collection H
Classification is 96,291 and the estimated hour burden per response is
2.07 hours. The estimated total number of respondents for the
information collection H-1B and H-1B1 Data Collection and Filing Fee
Exemption Supplement is 96,291 and the estimated hour burden per
response is 1 hour. The estimated total number of respondents for the
information collection L Classification Supplement is 37,831 and the
estimated hour burden per response is 1.34 hour. The estimated total
number of respondents for the information collection O and P
Classification Supplement is 22,710 and the estimated hour burden per
response is 1 hour. The estimated total number of respondents for the
information collection Q-1 Classification Supplement is 155 and the
estimated hour burden per response is 0.34 hours. The estimated total
number of respondents for the information collection R-1

[[Page 72957]]

Classification Supplement is 6,635 and the estimated hour burden per
response is 2.34 hours.
(6) An estimate of the total public burden (in hours) associated
with the collection: The total estimated annual hour burden associated
with this collection of information is 1,103,130 hours.
(7) An estimate of the total public burden (in cost) associated
with the collection: The estimated total annual cost burden associated
with this collection of information is $70,681,290.

List of Subjects in 8 CFR Part 214

Administrative practice and procedure, Aliens, Cultural exchange
program, Employment, Foreign officials, Health professions, Reporting
and recordkeeping requirements, Students.

Accordingly, DHS proposes to amend chapter I of title 8 of the Code
of Federal Regulations as follows:

PART 214--NONIMMIGRANT CLASSES

0
1. The authority citation for part 214 continues to read as follows:

Authority: 6 U.S.C. 202, 236; 8 U.S.C. 1101, 1102, 1103, 1182,
1184, 1186a, 1187, 1221, 1281, 1282, 1301-1305, 1357, and 1372; sec.
643, Pub. L. 104-208, 110 Stat. 3009-708; Pub. L. 106-386, 114 Stat.
1477-1480; section 141 of the Compacts of Free Association with the
Federated States of Micronesia and the Republic of the Marshall
Islands, and with the Government of Palau, 48 U.S.C. 1901 note and
1931 note, respectively; 48 U.S.C. 1806; 8 CFR part 2; Pub. L. 115-
218, 132 Stat. 1547 (48 U.S.C. 1806).

0
2. Amend Sec. 214.1 by:
0
a. Revising paragraphs (c)(1) and (4);
0
b. Redesignating paragraph (c)(5) as paragraph (c)(7);
0
c. Adding new paragraph (c)(5) and paragraph (c)(6); and
0
d. Revising newly redesignated paragraph (c)(7).
The revisions and additions read as follows:

Sec. 214.1 Requirements for admission, extension, and maintenance of
status.

* * * * *
(c) * * *
(1) Extension or amendment of stay for certain employment-based
nonimmigrant workers. An applicant or petitioner seeking the services
of an E-1, E-2, E-3, H-1B, H-1B1, H-2A, H-2B, H-3, L-1, O-1, O-2, P-1,
P-2, P-3, P-1S, P-2S, P-3S, Q-1, R-1, or TN nonimmigrant beyond the
period previously granted, or seeking to amend the terms and conditions
of the nonimmigrant's stay without a request for additional time, must
file for an extension of stay or amendment of stay, on Form I-129, with
the fee prescribed in 8 CFR 103.7, with the initial evidence specified
in Sec. 214.2, and in accordance with the form instructions.
Dependents holding derivative status may be included in the petition if
it is for only one worker and the form version specifically provides
for their inclusion. In all other cases, dependents of the worker
should file extensions of stay using Form I-539.
* * * * *
(4) Timely filing and maintenance of status. (i) An extension or
amendment of stay may not be approved for an applicant or beneficiary
who failed to maintain the previously accorded status or where such
status expired before the application or petition was filed, except
that USCIS may excuse the late filing in its discretion where it is
demonstrated at the time of filing that:
(A) The delay was due to extraordinary circumstances beyond the
control of the applicant or petitioner, and USCIS finds the delay
commensurate with the circumstances;
(B) The applicant or beneficiary has not otherwise violated their
nonimmigrant status;
(C) The applicant or beneficiary remains a bona fide nonimmigrant;
and
(D) The applicant or beneficiary is not the subject of deportation
proceedings under section 242 of the Act (prior to April 1, 1997) or
removal proceedings under section 240 of the Act.
(ii) If USCIS excuses the late filing of an extension of stay or
amendment of stay request, it will do so without requiring the filing
of a separate application or petition and will grant the extension of
stay from the date the previously authorized stay expired or the
amendment of stay from the date the petition was filed.
(5) Deference to prior USCIS determinations of eligibility. When
adjudicating a request filed on Form I-129 involving the same parties
and the same underlying facts, USCIS gives deference to its prior
determination of the petitioner's, applicant's, or beneficiary's
eligibility. However, USCIS need not give deference to a prior approval
if: there was a material error involved with a prior approval; there
has been a material change in circumstances or eligibility
requirements; or there is new, material information that adversely
impacts the petitioner's, applicant's, or beneficiary's eligibility.
(6) Evidence of maintenance of status. When requesting an extension
or amendment of stay on Form I-129, an applicant or petitioner must
submit supporting evidence to establish that the applicant or
beneficiary maintained the previously accorded nonimmigrant status
before the extension or amendment request was filed. Evidence of such
maintenance of status may include, but is not limited to: copies of
paystubs, W-2 forms, quarterly wage reports, tax returns, contracts,
and work orders.
(7) Decision on extension or amendment of stay request. Where an
applicant or petitioner demonstrates eligibility for a requested
extension or amendment of stay, USCIS may grant the extension or
amendment in its discretion. The denial of an extension or amendment of
stay request may not be appealed.
* * * * *
0
3. Amend Sec. 214.2 by:
0
a. Revising paragraph (f)(5)(vi)(A);
0
b. Removing and reserving paragraph (h)(2)(i)(B);
0
c. Revising paragraphs (h)(2)(i)(E), (F), and (G) and (h)(4)(i)(B);
0
d. Revising the definitions of ``Specialty occupation'' and ``United
States employer'' in paragraph (h)(4)(ii);
0
e. Revising paragraphs (h)(4)(iii) heading and (h)(4)(iii)(A);
0
f. Adding paragraph (h)(4)(iii)(F);
0
g. Revising paragraph (h)(4)(iv) introductory text;
0
h. Adding paragraph (h)(4)(iv)(C);
0
i. Revising paragraphs (h)(8)(iii)(A)(1), (2), (4), and (5),
(h)(8)(iii)(A)(6)(i) and (ii), (h)(8)(iii)(A)(7), (h)(8)(iii)(D) and
(E), (h)(8)(iii)(F)(2)(iv), (h)(8)(iii)(F)(4), and (h)(9)(i);
0
j. Adding paragraphs (h)(9)(ii)(D) and (h)(9)(iii)(E);
0
k. Revising paragraph (h)(10)(ii);
0
l. Adding paragraph (h)(10)(iii);
0
m. Revising paragraphs (h)(11)(ii) and (h)(11)(iii)(A)(2) and (5);
0
n. Adding paragraphs (h)(11)(iii)(A)(6) and (7); and
0
o. Revising paragraphs (h)(14), (h)(19)(iii)(B)(4), (h)(19)(iii)(C),
(h)(19)(iv), (l)(14)(i), (o)(11), and (p)(13).
The revisions and additions read as follows:

Sec. 214.2 Special requirements for admission, extension, and
maintenance of status.

* * * * *
(f) * * *
(5) * * *
(vi) * * *
(A) The duration of status, and any employment authorization
granted under 8 CFR 274a.12(c)(3)(i)(B) or (C), of an F-1 student who
is the beneficiary of an H-1B petition subject to section 214(g)(1)(A)
of the Act (8 U.S.C. 1184(g)(1)(A)) and who requests a change of status
will be automatically extended until April 1 of the fiscal year

[[Page 72958]]

for which such H-1B status is being requested or until the validity
start date of the approved petition, whichever is earlier, where such
petition:
(1) Has been timely filed;
(2) Requests an H-1B employment start date in the fiscal year for
which such H-1B status is being requested consistent with paragraph
(h)(2)(i)(I) of this section; and
(3) Is nonfrivolous.
* * * * *
(h) * * *
(2) * * *
(i) * * *
(E) Amended or new petition--(1) General provisions. The petitioner
must file an amended or new petition, with the appropriate fee and in
accordance with the form instructions, to reflect any material changes
in the terms and conditions of employment or training or the
beneficiary's eligibility as specified in the original approved
petition. An amended or new H-1B, H-2A, or H-2B petition must be
accompanied by a current or new Department of Labor determination. In
the case of an H-1B petition, the requirement in this paragraph
(h)(2)(i)(E)(1) includes a current or new certified labor condition
application.
(2) Additional H-1B provisions. The amended or new petition must be
properly filed before the material change(s) takes place. The
beneficiary is not authorized to work under the materially changed
terms and conditions of employment until the new or amended H-1B
petition is approved and takes effect, unless the beneficiary is
eligible for H-1B portability pursuant to paragraph (h)(2)(i)(H) of
this section. Any change in the place of employment to a geographical
area that requires a corresponding labor condition application to be
certified to USCIS is considered a material change and requires an
amended or new petition to be filed with USCIS before the H-1B worker
may begin work at the new place of employment. Provided there are no
material changes in the terms and conditions of the H-1B worker's
employment, a petitioner does not need to file an amended or new
petition when:
(i) Moving a beneficiary to a new job location within the same area
of intended employment as listed on the labor condition application
certified to USCIS in support of the current H-1B petition approval
authorizing the H-1B nonimmigrant's employment;
(ii) Placing a beneficiary at a short-term placements(s) or
assignment(s) at any worksite(s) outside of the area of intended
employment for a total of 30 days or less in a 1-year period, or for a
total of 60 days or less in a 1-year period where the H-1B beneficiary
continues to maintain an office or work station at their permanent
worksite, the beneficiary spends a substantial amount of time at the
permanent worksite in a 1-year period, and the beneficiary's residence
is located in the area of the permanent worksite and not in the area of
the short-term worksite(s); or
(iii) An H-1B beneficiary is going to a non-worksite location to
participate in employee development, will be spending little time at
any one location, or when the job is peripatetic in nature, in that the
normal duties of the beneficiary's occupation (rather than the nature
of the employer's business) requires frequent travel (local or non-
local) from location to location. Peripatetic jobs include situations
where the job is primarily at one location, but the beneficiary
occasionally travels for short periods to other locations on a casual,
short-term basis, which can be recurring but not excessive (i.e., not
exceeding 5 consecutive workdays for any one visit by a peripatetic
worker, or 10 consecutive workdays for any one visit by a worker who
spends most work time at one location and travels occasionally to other
locations).
(F) Agents as petitioners. A United States agent may file a
petition in cases involving workers who are traditionally self-employed
or workers who use agents to arrange short-term employment on their
behalf with numerous employers, and in cases where a foreign employer
authorizes the agent to act on its behalf. A United States agent may
be: the actual employer of the beneficiary; the representative of both
the employer and the beneficiary; or a person or entity authorized by
the employer to act for, or in place of, the employer as its agent. The
burden is on the agent to explain the terms and conditions of the
employment and to provide any required documentation. In questionable
cases, a contract between the employers and the beneficiary or
beneficiaries may be required.
(1) An agent performing the function of an employer must guarantee
the wages and other terms and conditions of employment by contractual
agreement with the beneficiary or beneficiaries of the petition.
(2) A foreign employer who, through a United States agent, files a
petition for an H nonimmigrant alien is responsible for complying with
all of the employer sanctions provisions of section 274A of the Act and
8 CFR part 274a.
(G) Multiple H-1B petitions or registrations. An employer may not
file or submit, in the same fiscal year, more than one H-1B petition or
registration on behalf of the same alien if the alien is subject to the
numerical limitations of section 214(g)(1)(A) of the Act or is eligible
for exemption from those limitations under section 214(g)(5)(C) of the
Act. However, if an H-1B petition is denied, on a basis other than
fraud or misrepresentation, the employer may file a subsequent H-1B
petition on behalf of the same alien in the same fiscal year, provided
that USCIS continues to accept registrations, or petitions if
registration is suspended, towards the numerical allocations and there
is a valid registration that was selected on behalf of that
beneficiary, or if the filing qualifies as exempt from the applicable
numerical limitations. Otherwise, filing or submitting more than one H-
1B petition or registration by an employer on behalf of the same alien
in the same fiscal year may result in the denial or revocation of all
such petitions and invalidation of all such registrations. If USCIS
believes that related entities (including, but not limited to, a parent
company, subsidiary, or affiliate) may not have a legitimate business
need to file or submit more than one H-1B petition or registration on
behalf of the same alien subject to the numerical limitations of
section 214(g)(1)(A) of the Act or otherwise eligible for an exemption
under section 214(g)(5)(C) of the Act, USCIS may issue a request for
evidence, notice of intent to deny, or notice of intent to revoke each
petition. If any of the related entities fail to demonstrate a
legitimate business need to file or submit an H-1B petition or
registration on behalf of the same alien, all petitions filed on that
alien's behalf by the related entities may be denied or revoked, and
all such registrations invalidated. This limitation on petitions and
registrations will not apply if the multiple filings or submissions
occurred as a result of USCIS requiring petitioners to refile or
resubmit previously submitted petitions or registrations.
* * * * *
(4) * * *
(i) * * *
(B) General requirements for petitions involving a specialty
occupation--(1) Labor condition application requirements. (i) Before
filing a petition for H-1B classification in a specialty occupation,
the petitioner must obtain a certified labor condition application from
the Department of Labor in the occupational specialty in which the
alien(s) will be employed.
(ii) Certification by the Department of Labor of a labor condition
application in

[[Page 72959]]

an occupational classification does not constitute a determination by
the agency that the occupation in question is a specialty occupation.
USCIS will determine whether the labor condition application involves a
specialty occupation as defined in section 214(i)(1) of the Act and
properly corresponds with the petition. USCIS will also determine
whether all other eligibility requirements have been met, such as
whether the alien for whom H-1B classification is sought qualifies to
perform services in the specialty occupation as prescribed in section
214(i)(2) of the Act.
(iii) If all of the beneficiaries covered by an H-1B labor
condition application have not been identified at the time a petition
is filed, petitions for newly identified beneficiaries may be filed at
any time during the validity of the labor condition application using
photocopies of the same certified labor condition application. Each
petition must refer by file number to all previously approved petitions
for that labor condition application.
(iv) When petitions have been approved for the total number of
workers specified in the labor condition application, substitution of
aliens against previously approved openings cannot be made. A new labor
condition application will be required.
(v) If the Secretary of Labor notifies USCIS that the petitioning
employer has failed to meet a condition of paragraph (B) of section
212(n)(1) of the Act, has substantially failed to meet a condition of
paragraphs (C) or (D) of section 212(n)(1) of the Act, has willfully
failed to meet a condition of paragraph (A) of section 212(n)(1) of the
Act, or has misrepresented any material fact in the application, USCIS
will not approve petitions filed with respect to that employer under
section 204 or 214(c) of the Act for a period of at least 1 year from
the date of receipt of such notice.
(vi) If the employer's labor condition application is suspended or
invalidated by the Department of Labor, USCIS will not suspend or
revoke the employer's approved petitions for aliens already employed in
specialty occupations if the employer has certified to the Department
of Labor that it will comply with the terms of the labor condition
application for the duration of the authorized stay of aliens it
employs.
(2) Inspections, evaluations, verifications, and compliance
reviews. (i) The information provided on an H-1B petition and the
evidence submitted in support of such petition may be verified by USCIS
through lawful means as determined by USCIS, including telephonic and
electronic verifications and onsite inspections. Such verifications and
inspections may include, but are not limited to: electronic validation
of a petitioner's or third party's basic business information; visits
to the petitioner's or third party's facilities; interviews with the
petitioner's or third party's officials; reviews of the petitioner's or
third party's records related to compliance with immigration laws and
regulations; and interviews with any other individuals possessing
pertinent information, as determined by USCIS, which may be conducted
in the absence of the employer or the employer's representatives; and
reviews of any other records that USCIS may lawfully obtain and that it
considers pertinent to verify facts related to the adjudication of the
H-1B petition, such as facts relating to the petitioner's and
beneficiary's H-1B eligibility and compliance. The interviews may be
conducted on the employer's property, or as feasible, at a neutral
location agreed to by the interviewee and USCIS away from the
employer's property. An inspection may be conducted at locations
including the petitioner's headquarters, satellite locations, or the
location where the beneficiary works, has worked, or will work,
including third party worksites, as applicable. USCIS may commence
verification or inspection under this paragraph for any petition and at
any time after an H-1B petition is filed, including any time before or
after the final adjudication of the petition. The commencement of such
verification and inspection before the final adjudication of the
petition does not preclude the ability of USCIS to complete final
adjudication of the petition before the verification and inspection are
completed.
(ii) USCIS conducts on-site inspections or other compliance reviews
to verify facts related to the adjudication of the petition and
compliance with H-1B petition requirements. If USCIS is unable to
verify facts, including due to the failure or refusal of the petitioner
or a third party to cooperate in an inspection or other compliance
review, then such inability to verify facts, including due to failure
or refusal to cooperate, may result in denial or revocation of any H-1B
petition for H-1B workers performing services at the location or
locations that are a subject of inspection or compliance review,
including any third party worksites.
(3) Third party requirements. If the beneficiary will be staffed to
a third party, meaning they will be contracted to fill a position in a
third party's organization and becomes part of that third party's
organizational hierarchy by filling a position in that hierarchy (and
not merely providing services to the third party), the actual work to
be performed by the beneficiary must be in a specialty occupation. When
staffed to a third party, it is the requirements of that third party,
and not the petitioner, that are most relevant when determining whether
the position is a specialty occupation.
* * * * *
(ii) * * *
Specialty occupation means an occupation that requires theoretical
and practical application of a body of highly specialized knowledge in
fields of human endeavor including, but not limited to, architecture,
engineering, mathematics, physical sciences, social sciences, medicine
and health, education, business specialties, accounting, law, theology,
and the arts, and that requires the attainment of a bachelor's degree
or higher in a specific specialty, or its equivalent, as a minimum for
entry into the occupation in the United States. The required
specialized studies must be directly related to the position. A
position is not a specialty occupation if attainment of a general
degree, such as business administration or liberal arts, without
further specialization, is sufficient to qualify for the position. A
position may allow a range of degrees or apply multiple bodies of
highly specialized knowledge, provided that each of those qualifying
degree fields or each body of highly specialized knowledge is directly
related to the position.
United States employer means a person, firm, corporation,
contractor, or other association, or organization in the United States
that:
(1) Has a bona fide job offer for the beneficiary to work within
the United States, which may include telework, remote work, or other
off-site work within the United States;
(2) Has a legal presence in the United States and is amenable to
service of process in the United States; and
(3) Has an Internal Revenue Service Tax identification number.
(4) If the H-1B beneficiary possesses a controlling interest in the
petitioner, such a beneficiary may perform duties that are directly
related to owning and directing the petitioner's business as long as
the beneficiary will perform specialty occupation duties a majority of
the time, consistent with the terms of the H-1B petition.
(iii) General H-1B requirements--(A) Criteria for specialty
occupation position. A position does not meet the definition of
specialty occupation in paragraph (h)(4)(ii) of this section unless

[[Page 72960]]

it also satisfies at least one of the following criteria at paragraphs
(h)(4)(iii)(A)(1) through (4) of this section:
(1) A U.S. baccalaureate or higher degree in a directly related
specific specialty, or its equivalent, is normally the minimum
requirement for entry into the particular occupation;
(2) A U.S. baccalaureate or higher degree in a directly related
specific specialty, or its equivalent, is normally required for
parallel positions among similar organizations in the employer's United
States industry;
(3) The employer, or third party if the beneficiary will be staffed
to that third party, normally requires a U.S. baccalaureate or higher
degree in a directly related specific specialty, or its equivalent, for
the position; or
(4) The specific duties of the proffered position are so
specialized, complex, or unique that the knowledge required to perform
the duties are normally associated with the attainment of a U.S.
baccalaureate or higher degree in a directly related specific
specialty, or its equivalent.
(5) For purposes of the criteria at paragraphs (h)(4)(iii)(A)(1)
through (4) of this section, normally means conforming to a type,
standard, or regular pattern, and is characterized by that which is
considered usual, typical, common, or routine. Normally does not mean
always.
* * * * *
(F) Non-speculative position in a specialty occupation. At the time
of filing, the petitioner must establish that it has a non-speculative
position in a specialty occupation available for the beneficiary as of
the start date of the validity period as requested on the petition.
(iv) General documentary requirements for H-1B classification in a
specialty occupation. Except as specified in paragraph (h)(4)(iv)(C) of
this section, an H-1B petition involving a specialty occupation must be
accompanied by:
* * * * *
(C) In accordance with 8 CFR 103.2(b) and paragraph (h)(9) of this
section, USCIS may request evidence such as contracts, work orders, or
other similar evidence between all parties in a contractual
relationship showing the terms and conditions of the beneficiary's work
and the minimum educational requirements to perform the duties.
* * * * *
(8) * * *
(iii) * * *
(A) * * *
(1) Registration requirement. Except as provided in paragraph
(h)(8)(iv) of this section, before a petitioner can file an H-1B cap-
subject petition for a beneficiary who may be counted under section
214(g)(1)(A) of the Act (``H-1B regular cap'') or eligible for
exemption under section 214(g)(5)(C) of the Act (``H-1B advanced degree
exemption''), the petitioner must register to file a petition on behalf
of a beneficiary electronically through the USCIS website
(www.uscis.gov). To be eligible to file a petition for a beneficiary
who may be counted against the H-1B regular cap or the H-1B advanced
degree exemption for a particular fiscal year, a registration must be
properly submitted in accordance with 8 CFR 103.2(a)(1), paragraph
(h)(8)(iii) of this section, and the form instructions, for the same
fiscal year.
(2) Limitation on beneficiaries. A prospective petitioner must
electronically submit a separate registration for each beneficiary it
seeks to register, and each beneficiary must be named. A petitioner may
only submit one registration per beneficiary in any fiscal year. If a
petitioner submits more than one registration per beneficiary in the
same fiscal year, all registrations filed by that petitioner relating
to that beneficiary for that fiscal year may be considered invalid, and
USCIS may deny or revoke the approval of any petition filed for the
beneficiary based on those registrations. If USCIS determines that
registrations were submitted for the same beneficiary by the same or
different registrants, but using different identifying information,
USCIS may find those registrations invalid and deny or revoke the
approval of any petition filed based on those registrations.
Petitioners will be given notice and the opportunity to respond before
USCIS denies or revokes the approval of a petition.
* * * * *
(4) Selecting registrations based on unique beneficiaries.
Registrations will be counted based on the number of unique
beneficiaries who are registered.
(i) Should a random selection be necessary, each unique beneficiary
will only be counted once towards the random selection of
registrations, regardless of how many registrations were submitted for
that beneficiary. A petitioner may file an H-1B cap-subject petition on
behalf of a registered beneficiary only after a registration for that
beneficiary has been selected for that fiscal year. USCIS will notify
all registrants that submitted a registration on behalf of a selected
beneficiary that they may file a petition for that beneficiary.
(ii) Registrations must include the beneficiary's valid passport
information, as specified in the form instructions. Each beneficiary
must only be registered under one passport, and if the beneficiary is
abroad, the passport information must correspond to the passport the
beneficiary intends to use to enter the United States.
(5) Regular cap selection. In determining whether there are enough
registrations for unique beneficiaries to meet the H-1B regular cap,
USCIS will consider all properly submitted registrations relating to
beneficiaries that may be counted under section 214(g)(1)(A) of the
Act, including those that may also be eligible for exemption under
section 214(g)(5)(C) of the Act. Registrations will be counted based on
the number of unique beneficiaries that are registered.
(i) Fewer registrations than needed to meet the H-1B regular cap.
At the end of the annual initial registration period, if USCIS
determines that it has received fewer registrations for unique
beneficiaries than needed to meet the H-1B regular cap, USCIS will
notify all petitioners that have properly registered that their
registrations have been selected. USCIS will keep the registration
period open beyond the initial registration period, until it determines
that it has received a sufficient number of registrations for unique
beneficiaries to meet the H-1B regular cap. Once USCIS has received a
sufficient number of registrations for unique beneficiaries to meet the
H-1B regular cap, USCIS will no longer accept registrations for
petitions subject to the H-1B regular cap under section 214(g)(1)(A).
USCIS will monitor the number of registrations received and will notify
the public of the date that USCIS has received the necessary number of
registrations for unique beneficiaries (the ``final registration
date''). The day the public is notified will not control the applicable
final registration date. When necessary to ensure the fair and orderly
allocation of numbers under section 214(g)(1)(A) of the Act, USCIS may
randomly select the remaining number of registrations for unique
beneficiaries deemed necessary to meet the H-1B regular cap from among
the registrations received on the final registration date. This random
selection will be made via computer-generated selection, based on the
unique beneficiary.
(ii) Sufficient registrations to meet the H-1B regular cap during
initial registration period. At the end of the initial registration
period, if USCIS

[[Page 72961]]

determines that it has received more than sufficient registrations for
unique beneficiaries to meet the H-1B regular cap, USCIS will no longer
accept registrations under section 214(g)(1)(A) of the Act and will
notify the public of the final registration date. USCIS will randomly
select from among the registrations properly submitted during the
initial registration period the number of registrations for unique
beneficiaries deemed necessary to meet the H-1B regular cap. This
random selection will be made via computer-generated selection, based
on the unique beneficiary.
(6) * * *
(i) Fewer registrations than needed to meet the H-1B advanced
degree exemption numerical limitation. If USCIS determines that it has
received fewer registrations for unique beneficiaries than needed to
meet the H-1B advanced degree exemption numerical limitation, USCIS
will notify all petitioners that have properly registered that their
registrations have been selected. USCIS will continue to accept
registrations to file petitions for beneficiaries that may be eligible
for the H-1B advanced degree exemption under section 214(g)(5)(C) of
the Act until USCIS determines that it has received enough
registrations for unique beneficiaries to meet the H-1B advanced degree
exemption numerical limitation. USCIS will monitor the number of
registrations received and will notify the public of the date that
USCIS has received the necessary number of registrations for unique
beneficiaries (the ``final registration date''). The day the public is
notified will not control the applicable final registration date. When
necessary to ensure the fair and orderly allocation of numbers under
sections 214(g)(1)(A) and 214(g)(5)(C) of the Act, USCIS may randomly
select the remaining number of registrations for unique beneficiaries
deemed necessary to meet the H-1B advanced degree exemption numerical
limitation from among the registrations properly submitted on the final
registration date. This random selection will be made via computer-
generated selection, based on the unique beneficiary.
(ii) Sufficient registrations to meet the H-1B advanced degree
exemption numerical limitation. If USCIS determines that it has
received more than enough registrations for unique beneficiaries to
meet the H-1B advanced degree exemption numerical limitation, USCIS
will no longer accept registrations that may be eligible for exemption
under section 214(g)(5)(C) of the Act and will notify the public of the
final registration date. USCIS will randomly select the number of
registrations for unique beneficiaries needed to meet the H-1B advanced
degree exemption numerical limitation from among the remaining
registrations for unique beneficiaries who may be counted against the
advanced degree exemption numerical limitation. This random selection
will be made via computer-generated selection, based on the unique
beneficiary.
(7) Increase to the number of beneficiaries projected to meet the
H-1B regular cap or advanced degree exemption allocations in a fiscal
year. Unselected registrations will remain on reserve for the
applicable fiscal year. If USCIS determines that it needs to increase
the number of registrations for unique beneficiaries projected to meet
the H-1B regular cap or advanced degree exemption allocation, and
select additional registrations for unique beneficiaries, USCIS will
select from among the registrations that are on reserve a sufficient
number to meet the H-1B regular cap or advanced degree exemption
numerical limitation, as applicable. If all of the registrations on
reserve are selected and there are still fewer registrations than
needed to meet the H-1B regular cap or advanced degree exemption
numerical limitation, as applicable, USCIS may reopen the applicable
registration period until USCIS determines that it has received a
sufficient number of registrations for unique beneficiaries projected
as needed to meet the H-1B regular cap or advanced degree exemption
numerical limitation. USCIS will monitor the number of registrations
received and will notify the public of the date that USCIS has received
the necessary number of registrations (the new ``final registration
date''). The day the public is notified will not control the applicable
final registration date. When necessary to ensure the fair and orderly
allocation of numbers, USCIS may randomly select the remaining number
of registrations for unique beneficiaries deemed necessary to meet the
H-1B regular cap or advanced degree exemption numerical limitation from
among the registrations properly submitted on the final registration
date. If the registration period will be re-opened, USCIS will announce
the start of the re-opened registration period on the USCIS website at
www.uscis.gov.
* * * * *
(D) H-1B cap-subject petition filing following registration--(1)
Filing procedures. In addition to any other applicable requirements, a
petitioner may file an H-1B petition for a beneficiary who may be
counted under section 214(g)(1)(A) or eligible for exemption under
section 214(g)(5)(C) of the Act only if the petition is based on a
valid registration, which means that the registration was properly
submitted in accordance with 8 CFR 103.2(a)(1), paragraph (h)(8)(iii)
of this section, and the registration tool instructions, and was
submitted by the petitioner, or its designated representative, on
behalf of the beneficiary who was selected for that cap season by
USCIS. A petitioner may not substitute the beneficiary named in the
original registration or transfer the registration to another
petitioner. Any H-1B petition filed on behalf of a beneficiary must
contain and be supported by the same identifying information provided
in the selected registration. Petitioners must submit evidence of the
passport used at the time of registration to identify the beneficiary.
In its discretion, USCIS may find that a change in identifying
information in some circumstances would be permissible. Such
circumstances could include, but are not limited to, a legal name
change due to marriage, change in gender identity, or a change in
passport number or expiration date due to renewal or replacement of a
stolen passport, in between the time of registration and filing the
petition. USCIS may deny or revoke the approval of an H-1B petition
that does not meet these requirements.
(2) Registration fee. USCIS may deny or revoke the approval of an
H-1B petition if it determines that the fee associated with the
registration is declined, not reconciled, disputed, or otherwise
invalid after submission. The registration fee is non-refundable and
due at the time the registration is submitted.
(3) Filing period. An H-1B cap-subject petition must be properly
filed within the filing period indicated on the relevant selection
notice. The filing period for filing the H-1B cap-subject petition will
be at least 90 days. If petitioners do not meet the requirements of
this paragraph (h)(8)(iii)(D), USCIS may deny or reject the H-1B cap-
subject petition.
(E) Calculating the number of registrations needed to meet the H-1B
regular cap and H-1B advanced degree exemption allocation. When
calculating the number of registrations for unique beneficiaries needed
to meet the H-1B regular cap and the H-1B advanced degree exemption
numerical limitation for a given fiscal year, USCIS will take into
account historical data related to approvals, denials, revocations, and
other relevant factors. If necessary,

[[Page 72962]]

USCIS may increase those numbers throughout the fiscal year.
(F) * * *
(2) * * *
(iv) The nonprofit entity has entered into a formal written
affiliation agreement with an institution of higher education that
establishes an active working relationship between the nonprofit entity
and the institution of higher education for the purposes of research or
education, and a fundamental activity of the nonprofit entity is to
directly contribute to the research or education mission of the
institution of higher education. A nonprofit entity may engage in more
than one fundamental activity.
* * * * *
(4) An H-1B beneficiary who is not directly employed by a
qualifying institution, organization, or entity identified in section
214(g)(5)(A) or (B) of the Act will qualify for an exemption under such
section if the H-1B beneficiary will spend at least half of their work
time performing job duties at a qualifying institution, organization,
or entity and those job duties directly further an activity that
supports or advances one of the fundamental purposes, missions,
objectives, or functions of the qualifying institution, organization,
or entity, namely, either higher education, nonprofit research, or
government research. Work performed ``at'' the qualifying institution
may include work performed in the United States through telework,
remote work, or other off-site work. When considering whether a
position is cap-exempt, USCIS will focus on the job duties to be
performed, rather than where the duties are physically performed.
* * * * *
(9) * * *
(i) Approval. (A) USCIS will consider all the evidence submitted
and any other evidence independently required to assist in
adjudication. USCIS will notify the petitioner of the approval of the
petition on a Notice of Action. The approval notice will include the
beneficiary's (or beneficiaries') name(s) and classification and the
petition's period of validity. A petition for more than one beneficiary
and/or multiple services may be approved in whole or in part. The
approval notice will cover only those beneficiaries approved for
classification under section 101(a)(15)(H) of the Act.
(B) Where an H-1B petition is approved for less time than requested
on the petition, the approval notice will provide or be accompanied by
a brief explanation for the validity period granted.
(ii) * * *
(D)(1) If an H-1B petition is adjudicated and deemed approvable
after the initially requested validity period end-date or end-date for
which eligibility is established, the officer may issue a request for
evidence (RFE) asking the petitioner whether they want to update the
requested dates of employment. Factors that inform whether USCIS issues
an RFE could include, but would not be limited to: additional petitions
filed or approved on the beneficiary's behalf, or the beneficiary's
eligibility for additional time in H-1B status. If the new requested
period exceeds the validity period of the labor condition application
already submitted with the H-1B petition, the petitioner must submit a
certified labor condition application with a new validity period that
properly corresponds to the new requested validity period on the
petition and an updated prevailing or proffered wage, if applicable,
except that the petitioner may not reduce the proffered wage from that
originally indicated in their petition. This labor condition
application may be certified after the date the H-1B petition was filed
with USCIS. The request for new dates of employment and submission of a
labor condition application corresponding with the new dates of
employment, absent other changes, will not be considered a material
change. An increase to the proffered wage will not be considered a
material change, as long as there are no other material changes to the
position.
(2) If USCIS does not issue an RFE concerning the requested dates
of employment, if the petitioner does not respond, or the RFE response
does not support new dates of employment, the petition will be
approved, if otherwise approvable, for the originally requested period
or until the end-date eligibility has been established, as appropriate.
However, the petition will not be forwarded to the Department of State
nor will any accompanying request for a change of status, an extension
of stay, or amendment of stay, be granted.
(iii) * * *
(E) H-1B petition for certain beneficiary-owned entities. The
initial approval of a petition filed by a United States employer in
which the H-1B beneficiary possesses a controlling ownership interest
in the petitioning organization or entity will be limited to a validity
period of up to 18 months. The first extension (including an amended
petition with a request for an extension of stay) of such a petition
will also be limited to a validity period of up to 18 months.
* * * * *
(10) * * *
(ii) Denial for statement of facts on the petition, H-1B
registration, temporary labor certification, labor condition
application, or invalid H-1B registration. The petition will be denied
if it is determined that the statements on the petition, H-1B
registration (if applicable), the application for a temporary labor
certification, or the labor condition application, were inaccurate,
fraudulent, or misrepresented a material fact, including if the
attestations on the registration are determined to be false. An H-1B
cap-subject petition also will be denied if it is not based on a valid
registration submitted by the petitioner (or its designated
representative), or a successor in interest, for the beneficiary named
or identified in the petition.
(iii) Notice of denial. The petitioner will be notified of the
reasons for the denial and of the right to appeal the denial of the
petition under 8 CFR part 103. There is no appeal from a decision to
deny an extension of stay to the alien.
(11) * * *
(ii) Immediate and automatic revocation. The approval of any
petition is immediately and automatically revoked if the petitioner
goes out of business, files a written withdrawal of the petition, or
the Department of Labor revokes the labor certification upon which the
petition is based. The approval of an H-1B petition is also immediately
and automatically revoked upon notification from the H-1B petitioner
that the beneficiary is no longer employed.
(iii) * * *
(A) * * *
(2) The statement of facts contained in the petition, H-1B
registration (if applicable), the application for a temporary labor
certification, or the labor condition application, was not true and
correct, inaccurate, fraudulent, or misrepresented a material fact,
including if the attestations on the registration are determined to be
false; or
* * * * *
(5) The approval of the petition violated paragraph (h) of this
section or involved gross error;
(6) The H-1B cap-subject petition was not based on a valid
registration submitted by the petitioner (or its designated
representative), or a successor in interest, for the beneficiary named
or identified in the petition; or
(7) The petitioner failed to timely file an amended petition
notifying USCIS of

[[Page 72963]]

a material change or otherwise failed to comply with the material
change reporting requirements in paragraph (h)(2)(i)(E) of this
section.
* * * * *
(14) Extension of visa petition validity. The petitioner must file
a request for a petition extension on the Form I-129 to extend the
validity of the original petition under section 101(a)(15)(H) of the
Act. A request for a petition extension generally may be filed only if
the validity of the original petition has not expired.
* * * * *
(19) * * *
(iii) * * *
(B) * * *
(4) The nonprofit entity has entered into a formal written
affiliation agreement with an institution of higher education that
establishes an active working relationship between the nonprofit entity
and the institution of higher education for the purposes of research or
education, and a fundamental activity of the nonprofit entity is to
directly contribute to the research or education mission of the
institution of higher education. A nonprofit entity may engage in more
than one fundamental activity.
(C) A nonprofit research organization or government research
organization.
When a fundamental activity of a nonprofit organization is engaging
in basic research and/or applied research, that organization is a
nonprofit research organization. When a fundamental activity of a
governmental organization is the performance or promotion of basic
research and/or applied research, that organization is a government
research organization. A governmental research organization may be a
Federal, state, or local entity. A nonprofit research organization or
governmental research organization may perform or promote more than one
fundamental activity. Basic research is general research to gain more
comprehensive knowledge or understanding of the subject under study,
without specific applications in mind. Basic research is also research
that advances scientific knowledge but does not have specific immediate
commercial objectives although it may be in fields of present or
potential commercial interest. Applied research is research to gain
knowledge or understanding to determine the means by which a specific,
recognized need may be met. Applied research includes investigations
oriented to discovering new scientific knowledge that has specific
commercial objectives with respect to products, processes, or services.
Both basic research and applied research may include research and
investigation in the sciences, social sciences, or humanities and may
include designing, analyzing, and directing the research of others if
on an ongoing basis and throughout the research cycle.
* * * * *
(iv) Nonprofit or tax-exempt organizations. For purposes of
paragraphs (h)(19)(iii)(B) and (C) of this section, a nonprofit
organization or entity must be determined by the Internal Revenue
Service as a tax exempt organization under the Internal Revenue Code of
1986, section 501(c)(3), (c)(4), or (c)(6), 26 U.S.C. 501(c)(3),
(c)(4), or (c)(6).
* * * * *
(l) * * *
(14) * * *
(i) Individual petition. The petitioner must file a petition
extension on Form I-129 to extend an individual petition under section
101(a)(15)(L) of the Act. A petition extension generally may be filed
only if the validity of the original petition has not expired.
* * * * *
(o) * * *
(11) Extension of visa petition validity. The petitioner must file
a request to extend the validity of the original petition under section
101(a)(15)(O) of the Act on the form prescribed by USCIS, in order to
continue or complete the same activities or events specified in the
original petition. A petition extension generally may be filed only if
the validity of the original petition has not expired.
* * * * *
(p) * * *
(13) Extension of visa petition validity. The petitioner must file
a request to extend the validity of the original petition under section
101(a)(15)(P) of the Act on the form prescribed by USCIS in order to
continue or complete the same activity or event specified in the
original petition. A petition extension generally may be filed only if
the validity of the original petition has not expired.
* * * * *

Alejandro N. Mayorkas,
Secretary, U.S. Department of Homeland Security.
[FR Doc. 2023-23381 Filed 10-20-23; 8:45 am]
BILLING CODE 9111-97-P

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