New Rules Set Significant Restrictions on H-1B Visas

The Trump administration released long-expected interim final rules on H-1B high-skill work visas that tighten eligibility standards, raise wage requirements, and apply greater scrutiny to employers with H-1B workers at third party work sites.

DHS tightened the definition of “specialty occupation” and “employee-employer relationship” and limited the visa approval for H-1B workers at third-party locations to one year (down from three) in its new rule.  The DHS rulemakings will go into effect on December 7 of this year. 

"The DHS rule will affect over one-third of the H-1B petitions," said acting deputy secretary of Homeland Security Ken Cuccinelli.  "I cannot overstate how big a deal this is."  Detractors argue that the new requirements are overly specific and fail to align with the ever-evolving realities of which educational backgrounds are required to fill certain high-skilled roles. 

The Department of Labor’s interim final rule sets wage levels at about 30% higher for each of the four wage levels currently used to determine wages for H-1B workers.  The DOL rule is effective immediately. 

“The primary purpose of these changes is to.... better reflect the actual wages earned by U.S. workers similarly employed to foreign workers,” the rule states.  However, critics claim the new rule boosts wages beyond similarly employed American workers.  “This seems contrary to the entire purpose of a prevailing wage requirement," Fragoman's Kevin Miner said, "and may put employers in the impossible position of having to choose whether to comply with the DOL new wage requirements or to comply with law requiring equal pay regardless of nationality.”

Looking ahead:  It is unclear whether a Biden administration would unwind the rulemakings, though Vice President Biden's platform states he supports raising the wages required for H-1B workers.  It is also possible that the next Congress reverses the rulemakings under the Congressional Review Act.  In the meantime, the interim final rules are expected to be met by legal challenges.