Tag Archive for: H-1B

Cyrus Mehta & Kaitlyn Box*

H-1B Enforcement While Working Abroad: Why Are CBP Officers in Abu Dhabi Scrutinizing LCAs?

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By Cyrus D. Mehta and Kaitlyn Box*

Recently, reports have surfaced of issues with U.S. Customs and Border Protection (CBP) Preclearance in Abu Dhabi – namely, that beneficiaries who had been outside the United States were asked questions about whether the conditions described in the Labor Conditions Application (LCA) had been complied with while they were working abroad. The LCA framework and DOL’s protective purpose are defined around H-1B employment in the U.S., which makes CBP’s apparent focus on foreign remote-work patterns somewhat unusual from a traditional LCA-enforcement perspective.

 The American Immigration Lawyers Association solicited examples of these problems in March 2026, and an article from the American Bazaar, despite misstating some information, recounts the plight of an individual who passed through Abu Dhabi preclearance and informed officers that “she had remained in India for close to two months and had worked part time during that period while using her Paid Time Off (PTO)…Officers allegedly determined that she had spent too long outside the United States and questioned the fact that she continued to receive pay from her U.S. employer while working remotely from India. Her visa stamp was reportedly marked ‘Cancelled and Withdrawn,’ and she was told she would need to apply again.” Gnanamookan Senthurjothi, a U.S. immigration lawyer, reported instances of “ increased scrutiny of H‑1B travelers transiting Abu Dhabi’s U.S. preclearance facility, especially on Etihad flights, where individuals who have worked remotely abroad for 2+ months are facing intensive questioning and, in some cases, visa revocation” in a recent LinkedIn post. 

Although it is hoped that these reports are aberrations that CBP will prevent from recurring in future, these reports are troubling. The conditions stated on an LCA, such as a beneficiary’s salary and worksite, are typically construed as applying only to employment within the U.S., as U.S. immigration laws cannot generally regulate employment that takes place abroad.  Because H-1B is a U.S. admission/status classification, a foreign national who is physically outside the U.S. is not ‘in’ H-1B status during that time and, as such, is not required to hold H-1B status to perform services while abroad for a U.S. employer. The immigration consequences arise when that individual seeks re-admission in H-1B classification and CBP or USCIS evaluates whether they have complied with, or will comply with, the terms of the approved petition and LCA.

 The situation in Abu Dhabi raises interesting questions, however, regarding the extent to which activities abroad can impact an employer’s LCA compliance. 

INA 212(n)(2)(C)(vii) specifies that an employer must continue to pay a full-time H-1B worker the wages indicated in the LCA even during a period of “nonproductive period”, if the nonproductive status is “due to a decision by the employer (based on factors such as lack of work)”. This provision prohibits “benching”, or a scenario in which an employer stops paying the required wages to an H-1B worker during periods in which business is slow and there is insufficient work for the individual. Given the types of questions allegedly being raised by officers at Abu Dhabi preclearance, the Department of Labor could hypothetically find that an employer had engaged in “benching” and hold the company liable for back wages if it had not terminated an employee’s H-1B employment in the U.S., and was not paying her the wages listed on the LCA while she worked abroad.

DOL enforcement practice and published decisions tend to focus on underpayment and benching during periods of H-1B employment in the U.S. labor market. There is limited clear authority on how DOL treats extended periods of foreign work where the employer maintains the H-1B petition but modifies pay or duties while the worker is abroad.  Clearly, the US cannot sanction an employer for failing to post notice of the employer’s LCA obligations at a work location abroad. The INA and DOL rules all contemplate compliance of an employer’s LCA obligations when the worker is employed in the US and not at a foreign worksite.

 Ideally, to completely avoid benching liability,  it would be prudent if the employer withdraws the petition while the H-1B worker is employed remotely abroad for long stretches and not paid the required wage. However, this may no longer practical as the employer may have to pay the $100,000 fee under Trump’s H-1B Proclamation when it refiles an H-1B petition on behalf of an overseas H-1B worker to bring them back to the US. Moreover, many remote workers are only working overseas for their US employers because they are waiting for visa appointments or have been subject to “administrative processing” at US posts. Withdrawing the H-1B in these situations would be counterintuitive. 

Due to the war in the Middle East, Abu Dhabi preclearance is not currently operational. CBP has withdrawn officers, who are currently stateside. Travelers routed through Abu Dhabi will be inspected by CBP in the U.S. Hence, the issue is moot at this time, but it may raise its ugly head again when Abu Dhabi preclearance is restored, or if the idea of going after H-1B workers employed overseas catches on with CBP at other ports of entry. Ultimately, CBP should refrain from enforcing the LCA when the worker is employed abroad as there is scant authority for it to do so and it is also impossible to enforce LCA obligations at foreign work locations. CBP can still ask questions about foreign work and pay when those facts bear on whether the underlying H-1B classification remains valid, but it should not be denying admission to H-1B workers because the employer ostensibly did not meet its LCA obligations when the worker was employed abroad. 

*Kaitlyn Box is a Partner at Cyrus D. Mehta & Partners PLLC.

Cyrus Mehta & Kaitlyn Box*

New Fields in Form  I-129 for H-1B Classification Need  to Sync with Appropriate Wage Levels in the Lottery and Labor Condition Application

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By Cyrus D. Mehta and Kaitlyn Box*

On February 27, 2026, USCIS published a new edition of Form I-129, which it will accept exclusively beginning April 1, 2026. The new edition of Form I-129 introduces several new fields in the H-1B and H-1B1 Data Collection and Filing Fee Exemption Supplement. Question 7 through 11 on page 21 of the supplement request the following specific information: 

  • Level of education required for the position
  • Field(s) of study that would qualify someone for the position
  • Years of experience required in order to qualify for the position
  • Special skills required in order to qualify for the position
  • Number of people the beneficiary will supervise, and their position titles

Additionally, question 2 on section 3, page 22 of the H-1B and H-1B1 Data Collection and Filing Fee Exemption Supplement requests that the appropriate wage level, I through IV, be selected for H-1B cap petitions. 

Many of these new fields appear designed to comply with the December 2025 Department of Homeland Security final rule that introduced a weighted selection process for the H-1B lottery.  The H-1B registration period for FY 2027 runs from March 4, 2026 to March 19, 2026, at 12 pm ET. 

Under the new system, discussed in detail in a prior blog, instead of a random lottery, registrations for unique beneficiaries or petitions will be assigned to the relevant Occupational Employment and Wage Statistics wage level and entered into the selection pool as follows: (1) registrations for unique beneficiaries or petitions assigned wage level IV will be entered into the selection pool four times; (2) those assigned wage level III will be entered into the selection pool three times; (3) those assigned wage level II would be entered into the selection pool two times; and (4) those assigned wage level I will be entered into the selection pool one time. Pursuant to the new rule, the H-1B cap electronic registration form requires employers to indicate what wage level will be offered to the beneficiary. Although USCIS has not promulgated guidance specifying whether the Labor Conditions Application (LCA) and H-1B petition filed on behalf of a selected beneficiary must match the wage level indicated at the time of registration, it is likely a best practice to ensure that both are in sync. 

The weighted selection rule will incentivize employers to select the highest possible wage level in order to increase the candidate’s likelihood of being selected in the lottery. However, complications could arise when the H-1B petition is filed. If the beneficiary’s job duties appear sophisticated or high level, but the employer is only offering a level I wage, which generally relates to an entry-level role, USCIS can challenge the appropriateness of the wage level. Similarly, USCIS could question the appropriateness of a level IV wage if the employer is offering a higher wage to an employee in order to increase the chances of selection in the H-1B lottery. However, the DHS final rule makes clear that “…if an employer values a beneficiary’s work and the unique qualities the beneficiary possesses, the employer could offer a higher wage than required by the prevailing wage level to reflect that value.” Thus, an employer should not be precluded from paying a level IV wage even to an entry-level worker if that employee’s unique skills, performance, or educational background justify offering a higher wage. 

However, even if the employer as selected a level IV wage in the H-1B lottery,  at the time of preparing the Labor Condition Application (“LCA”), the employer will need to assign the appropriate wage level based on the DOL 2009 prevailing wage guidance. Under the DOL prevailing wage guidance, an entry level employee on first brush may  qualify under level I wage or level II wage rather than Level  IV wage. The employer, on the other hand,  may be able to justify a level IV wage even if an employee has no prior or little experience based on an advanced degree and possessing other specialized skills, qualifications and certifications/licenses that are essential for performing the duties of the position. The level IV wage can further be justified based on the actual wage that is paid to similarly situated workers. Under DOL rule, the employer must pay the higher of the prevailing or actual wage. So even if the prevailing wage would be a level 1 wage but the actual wage is at level 4 wage, the employer must pay the higher level 4 wage. 

Additional complexities can arise once the employer begins the PERM labor certification process on behalf of an employee currently in H-1B status. An employer might be offering an employee a level I or II wage for the present H-1B position, but could have higher requirements for the PERM and I-140 position. For a PERM position that requires a bachelor’s degree and 5 years of experience, however, the DOL is likely to assign a level IV wage in the Prevailing Wage Determination. Although there could appear to be an inconsistency between the H-1B and PERM wage levels, the role described in the PERM is a future role. For beneficiaries from backlogged countries like India and China, this position may only materialize after 10 years or more when they become eligible for adjustment of status. Thus, because the employer is required to project the requirements and salary for a role to be performed many years in the future, it is not inherently problematic for an employer’s requirements, and, therefore, the corresponding wage level, to be substantially higher for a PERM position than for the present H-1B role.

*Kaitlyn Box is a Partner at Cyrus D. Mehta & Partners PLLC.

 

Cyrus Mehta

Evisceration of the H-1B Visa Program Through Executive Action

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By Cyrus D. Mehta

The H-1B visa program has been eviscerated through the promulgation of a final rule that would prioritize the allocation of H-1B visas in the lottery to those who are higher skilled and higher paid and through executive action. Relatedly, President Trump issued an executive order that would impose a $100,000 fee on H-1B petitions filed on behalf of beneficiaries who are outside the US. The $100,000 fee will not apply to H-1B petitions filed on behalf of beneficiaries who are already in the US and will also be requesting a change of status to H-1B from another nonimmigrant  status such as F-1 or J-1.  This executive order was recently upheld by a federal district court.  These combined actions have radically changed the H-1B visa program through the stroke of a pen and without any legislation from Congress. 

DHS Finalizes H-1B ‘Weighted Selection’ Rule 

On December 23, 2025, the Department of Homeland Security (DHS) announced a final rule implementing a weighted selection process that generally favors the allocation of H-1B visas to those who are, in the administration’s view, “higher-skilled and higher-paid.” The rule governs the process by which U.S. Citizenship and Immigration Services (USCIS) selects H-1B registrations for unique beneficiaries for filing of H-1B cap-subject petitions (or H-1B petitions for any year in which the registration requirement is suspended). DHS received 17,000 comments and made no changes from the proposed rule. Court challenges are expected to follow.

Under the new process, instead of a random lottery, registrations for unique beneficiaries or petitions will be assigned to the relevant Occupational Employment and Wage Statistics wage level and entered into the selection pool as follows: (1) registrations for unique beneficiaries or petitions assigned wage level IV will be entered into the selection pool four times; (2) those assigned wage level III will be entered into the selection pool three times; (3) those assigned wage level II would be entered into the selection pool two times; and (4) those assigned wage level I will be entered into the selection pool one time. Each unique beneficiary will only be counted once toward the numerical allocation projections regardless of how many registrations were submitted for that beneficiary or how many times the beneficiary is entered in the selection pool, DHS said. The new final rule is expected to make it significantly less likely that companies will hire international students when they graduate from U.S. universities.

The final rule,  published on December 29, 2025, is effective February 27, 2026, and will be in place for the Fiscal Year 2027 H-1B cap registration season.

District Court Rules Against Plaintiffs in $100,000 H-1B Fee Lawsuit, Plaintiffs Appeal

In Chamber of Commerce v. Department of Homeland Security, a district court has ruled in favor of the Department of Homeland Security (DHS), finding that imposition of a $100,000 fee for new H-1B applications and related actions were legal under a Presidential Proclamation pursuant to INA 212(f). 

“Defendants have the stronger position,” U.S. District Judge Beryl Howell said. “The lawfulness of the Proclamation and its implementation rests on a straightforward reading of congressional statutes giving the President broad authority to regulate entry into the United States for immigrants and nonimmigrants alike.”

Judge Howell noted, “To be clear, this decision in favor of defendants is not to dismiss or discount the past and ongoing contributions of H-1B workers to the American economy that plaintiffs highlight. Important as those contributions may be, the effects of the H-1B program on the American economy or national security, whether positive or negative, are simply not at issue in this case. The Supreme Court has long maintained that matters of economic and foreign policy are generally entrusted to the political branches of government and ‘rarely proper subjects for judicial intervention.’ ”

The plaintiff groups, the US Chamber of Commerce and the Association of American Universities,  have sought expedited review in the DC Circuit Court of Appeals. The groups said in their emergency consent motion to expedite appeal that neither section of the Immigration and Nationality Act that Trump cited in his proclamation that imposed the hefty fee for the H-1B nonimmigrant visa program “contains the clear statement necessary to delegate to the president Congress’s power to impose taxes on U.S. employers.”

“What is more, the proclamation takes a wrecking ball to Congress’s carefully crafted design of the program — in overriding the program in this manner, it exceeds the bounds of the president’s lawful authority,” the groups said.

Furthermore, multiple states joined an amicus brief supporting plaintiffs in Global Nurse Force v. Trump, filed in the Northern District of California. There is hope that the DC Circuit Court of Appeals and another district court will rule differently from Judge Howell’s decision. The brief in Global Nurse Force v. Trump asks the judge to temporarily block a new Trump administration policy to charge new H-1B immigrant visa applicants a $100,000 fee. Among other things, the states and other plaintiffs argue that the fee would exclude from hiring qualified H-1B workers nonprofits and schools that are unable to afford it.

The amicus brief includes the attorneys general of Arizona, California, Colorado, Connecticut, Delaware, the District of Columbia, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New Mexico, New York, North Carolina, Oregon, Rhode Island, Vermont, Washington, and Wisconsin.

Impact of the Combination of the Wage Prioritization Rule and the $100,000 Fee

For further insights, watch my interview on CNBC/TV18 with esteemed colleague Steven Brown regarding the H-1B new rule that will give priority to those being offered level 4 wages and the $100,000 H-1B fee that was upheld by a federal district court.

I have opined that with the $100,000 there will be fewer H-1B petitions filed on behalf of beneficiaries outside the US and most of the beneficiaries competing for the limited 85,000 H-1Bs per year will be mainly students in the US in F-1 status. They may have a better chance of selection even if they are not paid the highest-level wage. 

While the $100,000 may help students in F-1 status in the US, it will not benefit employers who need to also hire workers based overseas especially nonprofits, universities and startups. Even those who were previously counted under a prior H-1B lottery but are based overseas, a new petition filed on their behalf will have to be accompanied by the $100,000 fee. 

The two actions from the Executive Branch will not just kill the H-1B visa program but will also stymie innovation and prevent the entry of talented foreign nationals who will ultimately contribute to the US. It is hoped that courts will find both the actions unlawful and contrary to the INA. 

 

Cyrus Mehta

Navigating the Immigration Maze in an Age of Fear and Hope

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Immigration is one of the most complex areas of the law—so complex that even seasoned lawyers struggle to keep pace with shifting rules, changing interpretations, and unpredictable outcomes.

Yet despite this complexity, people continue to come. They come because the United States has long represented freedom, opportunity, and the promise of a better future. But our immigration system—deeply flawed as it is—too often stands in their way.

A System in Crisis

There are far too few legal pathways for people to come to the United States, whether to reunite with family or to work for employers who genuinely need their skills.

It is unconscionable that highly skilled Indian-born professionals must wait many decades for a green card. These individuals already have bona fide job offers. Their employers tested the U.S. labor market. Their labor certifications were approved. And still they wait—sometimes longer than a human lifetime.

We also see enormous delays in processing petitions for “immediate relatives”—spouses, parents, minor children—people who are supposed to have the most direct legal path. Add to this the unpredictability of visa stamping abroad, and families are thrown into needless uncertainty.

And then comes one of the most frustrating problems: the government repeatedly shifts the goalposts. For instance, a  new public charge policy allows consular officers to deny visas simply because a person has common conditions like obesity or diabetes—a discriminatory and medically unsound expansion of the rule.

Let us not forget that the Trump administration even floated a $100,000 filing fee for H-1B petitions—another unmistakable signal that their objective is not fairness, but exclusion. It then sought to reinterpret and clarify, but caused more confusion. As a result of Trump’s attacks on the H-1B visa program that is widely used by Indian nationals, racists are now openly targeting Indian Americans.

Fear as Policy

As defective as the immigration system already is, President Trump has weaponized it further through cruelty. He rose to power demonizing immigrants, and since his second inauguration in January 2025, he has embraced that cruelty openly.

He empowered people like Stephen Miller and Kristi Noem to unleash ICE in unprecedented ways—detaining noncitizens for lawful speech that displeases the administration.

Foreign students at prestigious U.S. universities have been taken by masked ICE agents simply for protesting Israel’s military operation in Gaza, which has resulted in over 65,000 deaths. 

Visas have been revoked for individuals who criticized the President, including Nobel laureates, or who voiced critical views of Charlie Kirk after his death. All such speech is protected by the First Amendment.

Even U.S. citizens have been caught in these sweeps, creating a level of fear this country has never experienced in modern times. America—once revered as a beacon of freedom—has not seen such weaponization of immigration power since its darkest moments.

Trump and some Republican politicians have openly threatened to deport naturalized citizens in the hope that they can denaturalize them. Mayor-elect Zohran Mamdani has been subjected to vile racist and Islamophobic attacks, all because his ascent represents immigrant power—and that terrifies those who have implemented policies to subjugate them and keep them in line. 

This administration has repeatedly declared that even lawful permanent residents are merely “guests” who may be removed for speech that offends those in power. They portray immigrants as unwelcome, job-stealing, dangerous interlopers—despite the reality that immigrants are the backbone of the labor force in construction, agriculture, caregiving, technology, and countless other sectors.

They imagine an America without immigrants—a fantasy that has never existed and never will.

Authoritarianism Begins With Noncitizens

We must understand this clearly: Authoritarianism rarely begins with citizens. It begins with noncitizens.

Once the rights of immigrants are trampled, as that can be more easily achieved,  this erosion expands outward. By the time citizens recognize the danger, the mechanisms of oppression are already in place.

This is why knowing our rights is essential. You do not have to speak to ICE if approached in the street. Agents need a judicial warrant—not an ICE-issued form—to arrest you.

And we need lawyers willing to defend these rights without fear. Lawyers should also be prepared to challenge the unconstitutional detentions of noncitizens through habeas corpus petitions in federal court. 

The March 2025 White House memo attacking immigration lawyers and Big Law pro bono programs was designed to intimidate us. It echoes the famous line from Henry VI: “The first thing we do, let’s kill all the lawyers.”

The memo claimed lawyers were undermining national security merely for representing asylum seekers. But under the Immigration and Nationality Act, people fleeing persecution have an absolute right to file asylum claims. Ethical lawyers do not file fraudulent cases. Representing the vulnerable is not a threat to America—it is a reflection of America at its best.

The Path Forward

We must vote out politicians who fear-monger on immigration and lack the courage to reform the system. We need a rational immigration framework with more legal pathways to unite families and allow people to work in the US.

We must reject the false narrative that immigrants harm the country. The truth has always been clear: Immigrants are good for America.

 

The Parsi Parable: A Lesson for Our Time

When a group of  Zoroastrian known as Parsis fled Persia and sought refuge in India over a thousand years ago, the local king sent them a vessel filled to the brim with milk, signaling that his land was full.

The Parsi leader asked for a spoonful of sugar. He stirred it gently into the milk without spilling a drop, saying: “Like this sugar, we will sweeten your land without displacing anyone.”

The king understood, and the Parsis went on to enrich India in immeasurable ways— economically, culturally, intellectually, and spiritually.

That story captures everything immigration truly represents:

Newcomers do not weaken a society—they enrich it.

They do not overflow the vessel—they transform it for the better.

 

Immigrant Power Today

Zohran Mamdani’s victory in New York is one such modern testament. In his words:

“New York will remain a city of immigrants, a city built by immigrants, powered by immigrants, and as of tonight led by an immigrant.”

That is the power of immigrant communities.

That is how we resist authoritarianism.

And that is why we must continue to fight—for justice, for humanity, and for the sweetness that immigrants, like sugar in milk, bring to every nation that welcomes them.

(This blog is based Cyrus Mehta’s prepared remarks as a keynote speaker at an IndiXspark event on November 15, 2025 in New York City)

Cyrus Mehta

Biden’s USICS Welcomes Entrepreneurs Through the H-1B and O Visas. Will Trump Do the Same?

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By Cyrus D. Mehta and Kaitlyn Box*

On January 8, 2025, USCIS issued updated guidance in its Policy Manual clarifying how entrepreneurs may qualify for O visas. The guidance states that:

“O beneficiaries may not petition for themselves. However, a separate legal entity owned by the beneficiary, such as a corporation or limited liability company, may file the petition on their behalf.”

USCIS’ guidance on this point was more ambiguous previously, which created concerns that an O petition filed through a beneficiary’s own company would be viewed as tantamount to self-employment. This updated guidance will afford a clear pathway for entrepreneurs to obtain O-1 visas through their own companies. Interestingly, the new guidance appears to apply to all O beneficiaries and not merely those who qualify for O-1 classification. This guidance also does not require such startups to meet conditions such as their ability to control the O-1’s employment by requiring a majority shareholder or a board of directors. USCIS seems to have relied on old administrative decisions that  recognize the separate existence of the corporate entity as separate and distinct legal entity from its owners and stockholders. See Matter of M, 8 I&N Dec. 24, 50 (BIA 1958, AG 1958); Matter of Aphrodite Investments Limited, 17 I&N Dec. 530 (Comm.1980); and Matter of Tessel, 17 I&N Dec. 631 (Act. Assoc. Comm. 1980).

USCIS’ updated O-1 guidance is in line with a provision in the Department of Homeland Security (DHS)’s H-1B modernization final rule (see our commentary), set to take effect on January 17, 2025. In the final rule, DHS clarified that beneficiaries with a controlling ownership interest in the petitioning entity may still be eligible for H-1B status subject to “reasonable conditions”. In a previous blog, we explored the conditions under which an entrepreneur could qualify for H-1B classification. Even under the existing regulations, it was possible for a startup founder or entrepreneur to qualify for H-1B classification if the petitioning company could establish a valid employer-employee relationship under at least one of the “hire, pay, fire, supervise, or otherwise control the work of” factors, and the job qualifies as a specialty occupation under one of the four criteria under 8 C.F.R. § 214.2(h)(4)(iii)(A). An entrepreneur who was able to meet these requirements through his or her own company would have been eligible for H-1B classification for an initial 3 year period, as well as a subsequent 3-year extension. Although the final rule more clearly states that a beneficiary with a controlling interest in the petitioning organization may nonetheless be eligible for H-1B classification, it limits the validity of the initial H-1B petition and first extension to 18 months each.

It is indeed salutary that the USCIS is thinking of encouraging entrepreneurs to obtain visas through their startups. While it would be ideal if Congress enacted a startup visa, it is at least a good start for USCIS to create pathways within the existing nonimmigrant visa system for entrepreneurs. It is hoped that the new Trump administration continues down the same pathway. Entrepreneurs should be encouraged to come to the US to establish startups that may succeed, and create more jobs and new business models that break the paradigm, which in turn will result in economic growth and create even more jobs. There are many Trump advisors, as well some on the left like Bernie Sanders, who view nonimmigrants on work visas as a threat to US workers and want to curb lawful nonimmigrant pathways to the United States. They are misguided, and it is hoped that they realize the benefits that noncitizen entrepreneurs bring to the US and should not kill the goose that lays the golden eggs!

*Kaitlyn Box is a Partner at Cyrus D. Mehta & Partners PLLC.

Cyrus Mehta

Comment to Proposed H-1B Rule Expressing Concern Over New Definition of Specialty Occupation

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December 22, 2023

Submitted via www.regulations.gov

DHS Docket ID No. USCIS-2023-0005

Department of Homeland Security

U.S. Citizenship and Immigration Services

Office of Policy and Strategy

5900 Capital Gateway Dr.

Camp Springs, MD 20588-0009

 

Attn: Charles L. Nimick

Chief, Business and Foreign Workers Division

Re:      Regulatory Proposal for Modernizing H–1B Requirements, Providing Flexibility in the F–1 Program, and Program Improvements Affecting Other Nonimmigrant Workers – Comment on Proposed Changes to H-1B Registration Process at 8 CFR 214.2(h)(8)(iii)

Dear Mr. Nimick:

Cyrus D Mehta & Partners PLLC (“CDMP”) is a New York law firm that focuses its practice mainly in the area of US immigration law and represents many clients in H-1B visa matters. CDMP also advocates on behalf of its clients to achieve fairer and just immigration laws, and also posts articles on its widely read The Insightful Immigration Blog, https://blog.cyrusmehta.com, in furtherance of this objective.  CDMP is accessible at www.cyrusmehta.com.

CDMP limits its comments to the proposed new definition of “specialty occupation” and the proposal that the USCIS will look to the  end client’s requirements to determine whether the position qualifies as a specialty occupation.  These are the NPRM that are cause for  concern.

The NPRM’s New Definition of “Specialty Occupation” Contradicts the INA

We commend DHS for clarifying in the proposed regulation that in order for a particular bachelor’s degree to be normally considered the minimum requirement, “normally does not mean always” and that the agency will not differentiate “normally” from the equivalent terms such as “mostly” or “typically” used in the DOL’s Occupational Outlook Handbook (“OOH”) and other sources of information describing the preparatory requirements for occupations. This is consistent with Innova Sols., Inc v. Baran, 983 F.3d 428 (9th Cir. 2020) where the court held that “ … there is no daylight between typically needed, per OOH, and normally required, per regulatory criteria. ‘Typically’ and ‘normally’ are synonyms.”

However, we are deeply concerned that the provision in the NPRM that requires specialized studies to be “directly related” to the position impermissibly exceeds the statutory requirements of the Immigration and Nationality Act  (“INA”). The NPRM at 8 CFR 214.2(h)(4)(ii) states,

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.

There is no requirement in the INA provision that the required specialized studies must be “directly related” to the position. Under § 214(i)(1) of the Immigration and Nationality Act (“INA”) a “specialty occupation” is  defined as an occupation that requires

  • Theoretical and practical application of a body of highly specialized knowledge, and
  • 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

Therefore, in contrast to the requirement in the NPRM that the degree must be “directly related” to the position, the statute at INA § 214(i)(1) clearly provides a substantially broader standard, stating that a requirement of a degree in the specialty or its equivalent can form the basis of a specialty occupation. A federal court explicitly stated that the statutory language defining a specialty occupation includes not only a required degree in the specialty but also other combinations of academic and experiential training that would qualify a beneficiary to perform the duties of the specialty occupation. In Tapis International v INS, the court held that a position may qualify as a specialty occupation if the employer requires a bachelor’s degree or its equivalent. For the “equivalent” language to have any reasonable meaning, it must encompass … various combinations of academic and experience based training. It defies logic to read the bachelor’s requirement of “specialty occupation” to include only those positions where a specific bachelor’s degree is offered.

Tapis International v INS, 94 F. Supp. 2d 172 (D. Massachusetts 2000).  The holding of Tapis International therefore specifically precludes the impermissible limitations that the agency seeks to impose in the NPRM by limiting employers to require only degrees that are “directly related.” The language in INA § 214(i)(1) that defines a specialty occupation by the requirement of either a bachelor’s degree or higher in the specific specialty “or its equivalent” as a minimum for entry into the occupation is distinct from the statutory requirement of the qualifications that the H-1B beneficiary must possess to qualify for the specialty occupation. The statute sets forth distinct requirements at INA § 214(i)(2) for the beneficiary to establish his or her qualifications for the specialty occupation, such as completion of a bachelor’s degree or experience in the specialty through progressively responsible positions relating to the specialty.

Therefore, the phrase in the statutory definition of specialty occupation at INA § 214(i)(1), which includes both a bachelor’s degree or higher in the specific specialty and the alternative of “its equivalent” broadens the permissible requirement for a specialty occupation to “not only skill, knowledge, work experience, or training … but also various combinations of academic and experience based training.” See Tapis, supra. Thus, under the statutory language, a position can qualify as specialty occupation not only on the basis of a specialized degree requirement, but also where the occupation requires a non-specialized degree combined with specialized experience, training or coursework as the equivalent of a specialized degree to serve as the minimum requirement for entry into the occupation. The rigid standard in the NPRM that the agency seeks to impose with its requirement that every permissible degree must be “directly related” contradicts the clear language of the statute and is therefore ultra vires and impermissible.

Another area of significant concern to our organization is the agency’s misplaced and impermissible attempt to exclude positions requiring business degrees from the definition of specialty occupation. In its focus on excluding these positions from the definition of specialty occupation, USCIS appears to base its analysis on outdated notions that positions requiring a business degree are too generalized to qualify for H-1B classification. On the contrary, graduates of undergraduate and graduate business programs typically gain high-demand, sought-after skills in specialized STEM and business areas, including data analysis, technology management, accounting, financial forecasting and analysis, and many other disciplines. For many years the agency’s practice has been to provide employers with the opportunity to establish that a position’s requirements and the beneficiary’s qualifications were sufficient to qualify as a specialty occupation through either a business degree with a formal concentration or, alternatively, through a specific combination of coursework, or in some cases specialized professional experience. We urge the agency to recognize this important and long-established policy and practice and continue to allow employers to build a record to establish the specialized needs of sponsored positions to qualify as specialty occupations.

Similarly, we have significant concerns with the language in the preamble to the rule that would disqualify positions that require an engineering degree, without specialization, from qualifying as a specialty occupation. The NPRM states that “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 the petitioner may not be able to demonstrate that a range of fields of engineering would qualify the H-1B worker to perform the duties of a specialty occupation. This interpretation is impermissibly narrow and subverts the intent and the plain language of the statute. When a federal court recently overturned an agency denial of an H-1B petition based on the employer’s requirement for a non-specialized engineering degree, the court explained that the statute does not require specialty occupations to be subspecialties. In its analysis, the court stated:

 

Importantly, the INA defines professions — the basis of the H-1B Regulation’s specialty occupation requirement — at the categorical level (e.g., “lawyers” and “teachers,” 8 U.S.C. § 1101(a)(32), rather than “tax lawyer” or “college English professor,” see id.) and specifically includes “engineers,” id. In addition, the specialty occupation provision arose from a need “to meet labor shortages . . . in occupational fields, such as nursing, engineering, and computer science.” 1988 Proposal, 53 FR 43217-01, at 43218 (emphasis added). Put simply, in contrast to a liberal arts degree, which the Service deemed “an [in]appropriate degree in a profession” because of its “broad[ness],” 1990 Rule, 55 FR 2606-01, at 2609, an engineering degree requirement meets the specialty occupation degree requirement.

InspectionXpert Corp. v. Cuccinelli, 1:19cv65, 58 (M.D.N.C. Mar. 5, 2020).

The decision in InspectionXpert, in addition to explaining that the statute disallows the requirement of specialized engineering degrees, aligns with the reality of the workplace and the skills gained in engineering degree programs. While there are many types of engineering disciplines, engineering degree programs provide a common core of advanced quantitative and technological skills that prepare the worker to perform the technical duties of a range of positions in specialty occupations such as Operations Research Analyst, Software Developer or Computer Systems Analyst. Again, we urge USCIS to recognize the long-established practice of allowing employers to build a record to establish the specialized needs of their positions to qualify as specialty occupations, including those where the employer believes that the requirements of a particular position includes a number of engineering degrees or a non-specified engineering degree.

Moreover, the disfavoring of business management and engineering degrees in qualifying a position for H-1B classification flatly contradicts the Biden Administration’s National Security guidance and strategy on “attracting and retaining the world’s best talent” and the President’s October 30, 2023, Executive Order on the “Safe, Secure and Trustworthy Development and Use of Artificial Intelligence.” Executive Order (“EO”) 14110. In studying the AI workforce, experts have found that primary degrees required for core AI job duties are business administration, computer science, engineering, mathematics, and statistics.[i] Yet, USCIS has chosen to provide an example in the preamble explanation of the NPRM cautioning employers about requiring the type of quantitative and problem-solving skills developed in an engineering degree as unlikely to be “directly related” to a qualifying H-1B position, and has proposed codifying in regulation that positions requiring business administration studies should not qualify for H-1B status. This creates unnecessary hurdles for employers engaging in on-campus recruitment in the U.S. where international students account for more than 50% of graduate engineering degrees [ii] and are among those completing a Master of Business Administration or Bachelor of Business Administration,[iii] and deprives our economy of the precise types of AI, technology and national security talent that the Biden Administration is making significant effort to attract and retain.

In conclusion, the proposal to redefine “specialty occupation” will not only contravene the statutory provisions defining the H-1B criteria, but it will make it unnecessarily restrictive and run counter to the Administration efforts to boost our competitive advantage and our economy. See Stuart Anderson’s Biden Immigration Rule Copies Some Trump Plans to Restrict H-B Visas, Forbes (October 23, 2023), which provides examples of emerging occupations vital to U.S. economic growth and competitiveness that may not qualify under the proposed definition of specialty occupation. The views of the undersigned are also reflected in this article.

Therefore, CDMP proposes that USCIS delete the language in proposed 8 CFR § 214.2(h)(4)(ii) stating that “[t]he required specialized studies must be directly related to the position” and “A position is not a specialty occupation if attainment of a general degree, such as business administration or liberal arts, without further specialization, if sufficient to qualify for the position.”

We request that the regulatory language remains consistent with the definition of “specialty occupation” under  INA § 214(i)(1) that  requires “[a]ttainment 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.” Also, the proposed regulation should allow for a specific body of knowledge required to perform the job duties of the position to properly interpret “or its equivalent” in INA § 214(i)(1). For instance, if the position of management analyst requires a bachelor’s degree and specialized experience or training, it ought to be considered a “specialty occupation” for H-1B classification if the beneficiary possesses a bachelor’s degree in a liberal arts field and also has experience or training in marketing. Similarly, the position ought to also qualify as a specialty occupation if the candidate possesses a bachelor’s degree in liberal arts but has significant course work in quantitative fields such as statistics and data analytics that would allow the beneficiary to perform the duties of the position of marketing analyst.

 

The End Client’s Requirements Should Not Determine the Degree Requirement

Under the NPRM, for a worker who will be “staffed” to a third-party client site, the client rather than the employer would need to establish that it would normally require a U.S. bachelor’s degree in a directly related specific specialty. We believe that this requirement is unduly burdensome in the normal course of business as it would be difficult for the sponsoring employer to obtain such documentation from a client.

The agency’s reliance in the NPRM on the 5th Circuit’s holding in Defensor v Meissner, 201 F. 3d 384 (5th Cir. 2000) is misplaced. In Defensor, the Court treated the client as a co-employer. In contrast, the H-1B regulations contemplate only the petitioner as the employer. The client does not supervise the H-1B worker or evaluate their job performance. The clients of the petitioner would certainly not want to be viewed as a co-employer and incur potential liability from a claim by the H-1B worker.

Under the NPRM, it is important to note that the educational requirements of the third party would only be taken into account and would only apply if the H-1B worker is contracted in a “staff augmentation” arrangement to the third party as opposed to providing services to the third party.  Defensor v. Meissner involved a staffing agency for nurses that filed the H-1B petitions and contracted the nurses to hospitals. There is a critical distinction between the nurse in Defensor v. Meissner and a software engineer who is providing services to the client rather than being staffed to the client. The absence of clear guidance on this key distinction is likely to result in a proliferation of RFEs resulting in burdens for the employer and inefficient use of government resources.

For these reasons, CDMP proposes that the phrase “or third party if the beneficiary will be staffed to that third party” in 8 CFR 214.2(h)(4)(iii) be deleted.

Sincerely,

 

Cyrus D. Mehta

Managing Partner

 

 

 

 

[i] Autumn Toney and Melissa Flagg, U.S. Demand for AI-Related Talent Part II: Degree Majors and Skill Assessment (September 2020), Center for Security and Emerging Technology, p. 3.

[ii] See e.g., National Science Foundation, Science & Engineering Indicators 2022, “International S&E Higher Education and Student Mobility,” which reported that students on temporary visas earned 50% of engineering Master’s degrees in the United States and over half of U.S. doctoral degrees in engineering (State of U.S. Science & Engineering 2022, National Science Board).

[iii] Higher-ed institutions commonly offer four different types of Business degrees: Bachelor of Arts or Bachelor of Science degrees in Business, which have different distribution requirements and different options for “specialization” as compared to a Bachelor in Business Administration and a Master in Business Administration. The proposed regulatory text would permit an adjudicator to start with a presumption that a Bachelors or Masters in Business Administration cannot be qualifying, based on the label of the degree, and by default ignore a completed minor or concentration, for example, as not being a “specialization,” without obligating the adjudicator in all cases to review and give weight to the transcript.

David Isaacson

Canada Begins New Program for Holders of U.S. H-1B Visas – And They Really Do Mean H-1B Visas, Not H-1B Status, Although Family Members Need Not Have Any Kind of H-4

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Update: on July 18, 2023, IRCC posted an announcement that the cap of 10,000 applications for the new program had been reached on July 17 and the program was closed. So the below post may be only of theoretical interest unless Canada reopens the program at a later date.

In a previous blog post, I described a new Canadian program for holders of H-1B visas, and flagged the issue that the initial announcement of the program and backgrounder issued by Immigration, Refugees and Citizenship Canada (IRCC) referred to “H-1B specialty occupation visa holders in the US” in such a way as to suggest that an actual H-1B visa stamp was necessary. As I explained in that post, there are multiple circumstances under which one can be in valid H-1B status, but not possess an H-1B visa stamp as such, such as in the event of a change of status or extension of stay. At the time, it was unclear whether this seeming requirement for a visa stamp was merely an imprecision in language. There were also other issues left open by the announcement.

IRCC has now published the application guidance for the new program, and has also posted the underlying temporary public policy established under section 25.2 of the Immigration and Refugee Protection Act. (The temporary public policy is dated June 23, but was only made public on its effective date of July 16.) Unfortunately, it appears from the temporary public policy and the application guidance that IRCC will indeed be requiring principal applicants for an open work permit under the new program to have an H-1B visa stamp, and not merely H-1B status, as well as reside in the United States. The good news is that there is no similar requirement that dependents of principal applicants have either H-4 visas or H-4 status, and indeed some family members who could not qualify for H-4 status will be eligible for the new program.

Part 1, section 1(iii.) of the temporary public policy specifies as one of the conditions to be met that an applicant for a work permit under the policy “holds an H-1B (Specialty Occupations category) visa issued by the United States of America that was valid at the time the work permit application referred to in (i) was submitted”. This reference to a visa, like the one in the original IRCC announcement, could potentially be read as ambiguous, but the application guidance specifies that a visa is a separate document required in addition to an H-1B approval notice and potentially Form I-94. The guidance states:
To apply, you’ll need
• a copy of your current H-1B visa
• Form I-797/I797B, Notice of Action
o This is a letter from the US government confirming your H-1B application was approved.
• proof that you live in the US, such as
o Form I-94, Arrival/Departure Record
o a recent utility bill
o an income tax report
o any document that proves you live in the US

The separate bullet point for “a copy of your current H-1B visa” implies that neither the Notice of Action showing approval of an H-1B application, nor a Form I-94, will suffice without the visa. It is not clear why IRCC has imposed this requirement, but it appears that they have done so.

One piece of good news, however, is that there is no similar requirement for family members of principal H-1B applicants. Indeed, not only are family members of principal applicants not required to have an H-4 visa stamp, they are not even required to have H-4 status, or be eligible for H-4 status. As long as they are a family member of an approved principal applicant under the definition contained in subsection 1(3) of the Immigration and Refugee Protection Regulations (IRPR), and reside in the United States, that is sufficient.

The definition of a family member under subsection 1(3) of the IRPR is somewhat broader than the definition of a family member for H-4 purposes under U.S. law. The IRPR definition includes “the spouse or common-law partner of the person” (here, of the principal applicant); “a dependent child of the person or of the person’s spouse or common-law partner”; or “a dependent child of a dependent child” of the person or the spouse or common-law partner. Thus, common-law partners of H-1B visa holders, children of common-law partners of H-1B visa holders, and some dependent grandchildren of H-1B visa holders and their spouses or common-law partners may be eligible for the new Canadian program although they would not be eligible for H-4 status.

Moreover, the definition of a child for these purposes does not cut off at age 21, as it does for H-4 purposes under INA 101(b)(1), 8 U.S.C. 1101(b)(1). Rather, under section 2 of the IRPR, a dependent child includes one who “is less than 22 years of age and is not a spouse or common-law partner, or . . . is 22 years of age or older and has depended substantially on the financial support of the parent since before attaining the age of 22 years and is unable to be financially self-supporting due to a physical or mental condition.” Thus, some 21-year-old children or disabled older children of H-1Bs, who would not be eligible for H-4 status, may be eligible for the new Canadian program, even if they have had to change to some other nonimmigrant status or are stuck in limbo as derivative beneficiaries of long-pending applications for adjustment of status, as long as they reside in the United States. 

Another open question I had raised in my prior blog post was how IRCC was going to allocate the 10,000 available numbers for principal applicants under the new program. Now that the effective date has passed without any announcement of a lottery or similar allocation mechanism, it appears that IRCC is simply going to allocate the numbers to the first 10,000 approved applications.

A third open question at the time of the announcement resulted from language on an IRCC guidance page for high-skilled workers that suggested applicants might want to consider the new program if “your US work visa is expiring soon”. Fortunately, however, nothing in the temporary public policy or the application guidance indicates that any particular date of H-1B expiration is required. The guidance page notwithstanding, even someone with, say, two and a half years left out of an H-1B petition and visa with three years validity, should qualify for the new program.

The new Canadian program has attracted significant positive media attention, which has understandably focused on the broader picture rather than details such as the distinction between H-1B visas and H-1B status. I do not mean to suggest, by highlighting this seemingly arbitrary distinction, that it should overshadow the other positive aspects of the program, or the implications that the program has for U.S. immigration policy. And it is good to see that IRCC will not be requiring dependent family members to meet U.S. requirements for an H-4 in order to benefit from the new program. But it would be even better if IRCC could remove the arbitrary exclusion of those who have changed status to H-1B or otherwise lack a valid H-1B visa, and open up the temporary program to H-1B nonimmigrants who reside in the United States in H-1B status even if they do not have H-1B visa stamps.

Cyrus Mehta

No Longer in Use: How Changes in SOC Systems Affect Employment-based Immigration

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Cyrus D. Mehta and Isabel Rajabzadeh*

The Standard Occupation Classification (SOC) is a federal statistical standard used by federal agencies to classify workers into occupational categories. The Office of Management and Budget (OMB) coordinates the Federal statistical system, including the SOC. The SOC Policy Committee assists the OMB in the SOC revision process, and is comprised of Federal agencies including the Bureau of Labor Statistics, Department of Labor. Most notably, SOC codes are used to categorize nonimmigrant and immigrant workers on the Permanent Employment Certification (“PERM” or Form ETA 9089, used to file most I-140s),  the Labor Condition Application (“LCA”, necessary to file H-1Bs and other visas) and the ETA 9142B for H-2B workers. The SOC system was created in order to facilitate job classification. It therefore collects occupational data and enables comparison of occupations across data sets.

In assigning the correct SOC code for employment-based petitions, one must compare the proffered position’s job duties and its requirements against the system. In addition, the requirement to pay prevailing wages as a minimum salary is mandatory for some employment-based visas. In order to determine the prevailing wage of a geographic area, one must look up the SOC code in the Foreign Labor Certification Data Center Online Wage Library (“OWL”) which is run by the U.S. Department of Labor.

According to the Department of Labor, the SOC serves as the framework for information being gathered through the Department of Labor’s Occupational Information Network (O*NET). The O*NET database includes detailed information on tasks, skills, tools used, credentials, and other information associated with the occupations. Much like the OWL, the information found on O*NET is listed by the occupation’s SOC codes.

Many may not realize the SOC codes exist, however, its use is integral to some employment-based visas and therefore, can result in a denial if not used properly. These codes are based on statistics, however, what happens when the system is updated? The SOC has been revised four times: 1980, 2000, and then again ten years later in 2010. The most recent update is the 2018 SOC system, which was deemed to be a “multi-year process” by the U.S. Bureau of Labor Statistics. In November 2020, the O*NET 25.1 Database incorporated the O*NET-SOC 2019 Taxonomy, which aligned with the 2018 SOC system. It stated, “updates and added new and emerging occupations ensure that the O*NET-SOC taxonomy not only represents the SOC structure, but reflects changes occurring in the world of work due to advancing technologies, innovative business practices, and the new organization of work.” However, the OWL still has not caught up with all of the SOC codes listed in the 2018 SOC system. Although the OWL states it integrated O*NET 25.3 on July 1, 2021, (which is later than version 25.1) it still does not reflect all of the changed SOC codes in the 2018 SOC system.

The Problem

In an effort to transition between the different SOC systems and SOC codes, “crosswalks” were developed to portray the changes of that year’s update. The crosswalks show which SOC code was replaced by a different title and/or SOC code number. The crosswalk from the 2000 SOC to the 2010 SOC can be found here. The crosswalk from the 2010 SOC to the 2018 SOC can be found here. As stated above, the OWL fails to keep up with the changes in the SOC codes. This causes huge discrepancies. Although not always detrimental to a case, it may cause unnecessary delays such a Request For Evidence (“RFE”).

For instance, “15-1031, Computer Software Engineers, Applications” is no longer in use and it was replaced by “15-1132 Software Developers, Applications” in the 2010 SOC system. Then, the 2018 SOC system changed the SOC code again to, “15-1252, Software Developers.” But what happens when a PERM was filed in 2011 which used the SOC code based on the 2010 SOC system? Then, 10 years later, the foreign national wants to downgrade their I-140 to take advantage of EB-3 priority dates? Which SOC code should be used on the I-140 form? Use of the 15-1031 SOC code would patch the previously filed PERM, however, it is no longer in use so that may raise flags. Use of the new SOC code may be effective, however, it may trigger a Request for Evidence. Even if there is an RFE, it could be overcome by explaining that 15-1132 (Software Developers, Applications) has replaced 15-1031 (Computer Software Engineers), which in turn has most recently been replaced by 15-1252 (Software Developers).

Not only are immigrant visas affected by this but the H-1B system also relies heavily on SOC codes. What happens when an SOC code like 15-1132 is used on an LCA because the new SOC code 15-1252 is not reflected in the OWL and thus, one cannot reference the most relevant information to determine the position? Although usage of the “older” SOC codes on LCAs seem to be permitted by the USCIS, there is significantly less detailed information on the OWL for each SOC code than O*NET. While the O*NET provides detailed explanations for each SOC code based on the 2018 SOC System, we are left using the 2010 SOC system to determine prevailing wage information. In responding to specialty occupation RFE’s, this system forces individuals to not only argue the specialized nature of the position, but that the O*NET also sees it as a specialty occupation in order to strengthen the argument. In some cases, this requires one to dig into the O*NET archives to find the older 2010 SOCs.

In an occupation like technology it is understandable that SOC codes require changes. However, the impact of these changes on petitions filed by employers for immigrant and nonimmigrant visa classifications are not formally addressed, and therefore, require us to connect the SOC code dots.

Finally, it should be noted that the Office of Foreign Labor Certification Data Center (“OFLC) has delayed the implementation of the 2018 SOCs to July 1, 2022. While O*NET has updated its system to the 2018 SOCs, the 2010 SOCs are archived in O*NET. Stakeholders can only use the 2010 SOCs until July 1, 2022, when the OFLC makes them go live in the Foreign Labor Application Gateway (FLAG), OWL, and in the PERM portal.

(This blog is for informational purposes and should not be viewed as a substitute for legal advice).

* Isabel Rajabzadeh is an Associate at Cyrus D. Mehta & Partners PLLC and is admitted to practice law in New York.

 

Cyrus Mehta

Trump’s Final Attacks on H-1B Visas and Legal Immigration: Reintroduction of the Wage Rule and Rule Requiring Client Companies to File H-1B Petitions 

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By Cyrus D. Mehta & Kaitlyn Box* 

Although President Trump is on his way out, his administration has promulgated two new rules that will have a devastating impact on the H-1B visa program and legal immigration.

Reissuance of DOL Wage Rule

 On January 12, 2021 the Department of Labor (DOL) published an advance copy of a final rule which changes the way in which prevailing wage levels will be computed for purposes of permanent labor certifications and Labor Condition Applications (LCAs). The final rule is expected to be published on January 14, 2021. The new rule will raise all four salary tiers, with the Level I wage, currently set at around the 17th percentile, eventually increasing to approximately the 35th percentile. However, the new rule acknowledges that an abrupt transition to the new wage levels could be disruptive to the economy and detrimental to U.S. employers, so the DOL will gradually introduce the new wages over a period of a year and a half, with the first increase set to take place on July 1, 2021. For H-1B workers who were the beneficiaries of approved I-140 petitions as of October 8, 2021, the phase-in period for the increased wages is extended over a three- and- a -half year period. See Stuart Anderson, DOL H-1B Visa Wage Rule: Donald Trump’s Bad Parting Gift To Immigrants, Forbes (Jan. 13, 2021), https://www.forbes.com/sites/stuartanderson/2021/01/13/dol-h-1b-visa-wage-rule-donald-trumps-bad-parting-gift-to-immigrants/ for a detailed summary of the phase-in.  

This rule was initially published with an effective date of October 8, 2020, but was struck down in the U.S. District Court for the District of Columbia last month on the ground that the COVID-19 pandemic did not give the DOL sufficient cause to publish the rule without a notice and comment period. Purdue University, et al., v. Scalia, et al., Civ. Actin No. 20-3006 (2020).  

Though the new wages themselves will be gradually phased in, the new rule will go into effect 60 days after publication, absent intervention from the Biden administration. Despite the phase in, the new wage levels will have no bearing to wages paid to US workers. They will not reflect prevailing or market wages and will be set at artificially high levels, thus rendering it difficult for an employer to either sponsor a new H-1B worker or retain an existing  H-1B worker at the time of renewal.  The American Immigration Lawyers’ Association (AILA) has reported that President-Elect Biden’s transition team will issue a memorandum on January 20, 2020 that will delay for 60 days the implementation of this and other last-minute regulations promulgated in the last days of the Trump presidency. 

Requirement to File H-1B Petitions by Employer and Third Party Client

On Friday, January 15, the Department of Homeland Security (DHS) quietly issued a new rule aimed at demolishing the H-1B visa program. The Department of Labor (DOL) also issued accompanying new guidance entitled “H-1B Program Bulletin Clarifying Filing Requirements for Labor Condition Applications by Secondary Employers at 20 C.F.R. §§ 655.715 and 655.730(a)”. The DHS rule is a limited version of a proposed rule published in October, the implementation of which was enjoined, and will take effect 180 days after publication in the Federal Register.  

The DHS rule changes and broadens the definition of the employer-employee relationship by incorporating common law elements into the definition of an employer. Historically, USCIS has been concerned with whether a petitioner who file an H-1B petition and then sends the beneficiary to a third-party worksite is the true employer of that beneficiary. The DHS rule, after taking into account comments made in response to the prior H-1B proposed rule, has now broadened the definition of the employer-employee relationship. 

However, the USCIS, by broadening the employer-employee definition, is now requiring the entities who use the services of the H-1B worker to also file H-1B petitions if they meet the broader definition of employer. The DOL’s corresponding guidance announced that it is reinterpreting its regulation to also require such “secondary employers” to file the LCA and H-1B petition. This departure completely contradicts USCIS’ concerns about whether the petitioner of an H-1B worker is a genuine employer or not by now rendering even the user of the H-1B worker’s services an employer.  

This outcome was never contemplated in the initial proposed H-1B rule which was blocked in court, and stake holders were not given an opportunity to comment on this aspect of the rule, which will create a radical paradigm shift. “Secondary employers” will have difficulty even complying with the rule since they do not pay the H-1B worker’s wages. The concept of secondary employment has existed in DOL regulations with respect to dependent employers and willful violators who needed to ascertain whether the assigning of an H-1B worker with a secondary employer would displace US workers. In 2000, the Fifth Circuit in Defensor v. Meissner also viewed a hospital that used the nurses of a staffing company as a secondary employer, but the Court developed this analytical framework of two employers to determine whether the hospital, as a secondary employer, required the nurses to have a bachelor’s degree or whether it was only the staffing company’s requirement. Defensor v. Meissner, 201 F. 3d 384 (5th Cir. 2000). However, those applications of “secondary employer” were limited to the dependent employer’s obligation to ensure there was no displacement of US workers when an H-1B worker was placed with a secondary employer, or in the case of Defensor v. Meissner, used to determine whether the position qualified for H-1B classification. The DOL uses this term in an unprecedented way, and this new interpretation will adversely impact the H-1B visa program – if not kill it completely.  

While this Friday night Trump rule in the waning days of a failed presidency has been designed to kill the India heritage IT industry, it will also hurt corporate America, which relies on this IT industry to keep humming away, creating jobs, and thus remaining competitive in the global economy. The change will also do significant harm to other sectors as well that involve third-party placements, including nursing, consulting, audit, engineering services among many others. 

However, the Biden administration may forestall the implementation of this rule after January 20th. The rule is likely to be politically unpalatable, even to Democrats who disfavor the H-1B visa program, given how overbroad and radical it is, as well as the deleterious impact it would have on the American economy and U.S. companies who use H-1B workers.  

The DHS circumvented the notice and comment process in promulgating this rule, alleging that the change in the employer definition would be inconsequential. Nothing could be further from the truth as the new rule requires the end client to also file an H-1B petition. To IT consulting companies, H-1B workers, and third parties who use the services of the workers, however, this rule would be catastrophic. By implementing an expanded definition of “employer”, the DHS and DOL will force third parties who do not pay an H-1B worker’s wage to file LCAs and H-1B petitions, interfering in contractual obligations and perhaps even forcing end clients to disclose confidential wage information. These secondary employers, according to a DOL Field Assistance Bulletin  that was issued upon the promulgation of the DHS rule, will need to comply with all the required wage and other obligations under the Labor Condition Application, along with maintaining their own pubic access file.  

This disconnect between the DHS statement and the rule’s true breadth could render  it even more vulnerable to the legal challenges that are sure to come.  For instance,  the Supreme Court in Kisor v. Wilkie, 139 S.Ct. 2400 (2019) recently held that  government agencies no longer get unbridled deference to interpret their  own regulations as they did under a previous holding, Auer v. Robbins, 519 US 452 (1997). While the need for a secondary employer to file an H-1B petition has been suggested in the preamble to the rule, it is not stated in the actual rule, which defines the employer in a broader sense but does not include any definition of “secondary employer”  or the need to file an H-1B petition. The DHS and DOL cannot now reinterpret the new definition of employer to require multiple H-1B petitions on behalf of the same H-1B worker when the new rule does not contain this requirement, and which has never been the authoritative position of the agency and has taken stakeholders by unfair surprise. There is a good argument to make to a court that this interpretation of the new rule ought to be held unreasonable under Kisor v. Wilkie. 

Even though Trump will exit on January 20, his attacks on legal immigration through last minute regulations such as the ones above will take time to challenge, unravel and rescind.

 *Kaitlyn Box graduated with a JD from Penn State Law in 2020, and works as a Law Clerk at Cyrus D. Mehta & Partners PLLC. 

 

Cyrus Mehta

Killing the H-1B Visa Also Kills the US Economy

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By Cyrus D. Mehta & Kaitlyn Box

Last week the Department of Labor (DOL) and the Department of Homeland Security (DHS) each issued new rules aimed at further attacking the H-1B visa program. The DOL rule, which was issued without affording the public an opportunity for notice and comment, significantly raises the minimum required wage that employers must pay to H-1B employees. The new rule could increase prevailing wages for some positions by as much as 40% or more.  The rule goes into effect immediately. The rule’s stated purpose is to ensure that U.S. workers are not forced out of their jobs by cheap foreign labor, but it advances no support for the outdated notion that H-1B workers are systematically underpaid. It was promulgated without any notice and comment as required under the Administrative Procedures Act. The DOL’s spurious justification for this unfair surprise was to prevent employers from rushing to filing Labor Condition Applications under the old wage rates that would have been valid for three years.

The rule, which was likely aimed at making H-1B employees too costly for U.S. employers to hire, poses several legal quandaries.  As pointed out by Stuart Anderson in a Forbes article, U.S. employers, for example, could be forced to pay H-1B employees significantly higher wages than their American counterparts, causing them to run afoul of equal pay laws that require employees who are in a protected class, including nationality, to be paid wages that are equivalent to those earned by employees who are not members of the protected class. Take, for example, New York’s New York State’s Pay Equity Law, which prohibits employers from paying an employee who is a member of one of the protected classes less than a worker without protected status for equal or substantially similar work. N.Y. Labor Law art. 6, § 194 (1) (2019). “Protected Class” is defined to include gender, race, creed, color, national origin, sexual orientation, gender identity or expression, military status, sex, disability, predisposing genetic characteristics, familial status, marital status, or domestic violence victim.

By promulgating this latest rule, the DOL could also be forcing employers to violate its own rules regarding the payment of wages to H-1B workers. Under 20 CFR § 656.731(a), employers must pay H-1B workers the higher of the prevailing or the actual wage. The actual wage is the wage paid to all other individuals with similar experience and qualifications for the specific employment in question. An employer could be forced to pay new hires significantly higher wages than those paid to existing H-1B workers holding the same position, resulting in the existing employees being paid less than the actual wage in violation of 20 CFR § 656.731(a). Employers could raise wages across the board to avoid this situation, but increasing wages substantially and with little warning is unlikely to be feasible for most, and could ultimately result in layoffs and damage to the U.S. economy.

The DHS rule, which goes into effect on December 7, 2020, makes it more difficult yet for U.S. employers to win H-1B approvals by imposing language requiring a direct relationship between the specialized degree and the occupation. Under the new rule, a position does not qualify as a “specialty occupation” unless:

“(1) A U.S. baccalaureate or higher degree in a directly related specific specialty, or its equivalent, is the minimum requirement for entry into the particular occupation in which the beneficiary will be employed;

(2) A U.S. baccalaureate or higher degree in a directly related specific specialty, or its equivalent, is the minimum requirement for entry into parallel positions at similar organizations in the employer’s United States industry;

(3) The employer has an established practice of requiring a U.S. baccalaureate or higher degree in a directly related specific specialty, or its equivalent, for the position. The petitioner must also establish that the proffered position requires such a directly related specialty degree, or its equivalent, to perform its duties; or

(4) The specific duties of the proffered position are so specialized, complex, or unique that they can only be performed by an individual with a U.S. baccalaureate or higher degree in a directly related specific specialty, or its equivalent.”

(emphasis added)

Among the DHS rule’s most significant changes is the reduction of the H-1B visa validity period from the current three years to just one year when the H-1B worker will work at a third-party worksite. Additionally, the rule inserts the requirement that only positions requiring education or experience in a “directly related specific specialty” will qualify as specialty occupations, greatly limiting the number of individuals who can successfully qualify for an H-1B visa. Employees in IT-related fields, who often hold general degrees in engineering or computer science, are likely to have particular difficulty meeting this new requirement.

The rule also imposes burdens on employers who send H-1B workers to third-party worksites, apparently reviving some of the onerous requirements struck down in IT Serve Alliance v. Cissna. In assessing whether an employer-employee relationship exists, the new rule encourages closer scrutiny as to whether the requisite level of employee supervision exists when the employee is stationed at a third-party worksite. Additionally, employers who employ H-1B workers at third-party worksites must submit additional evidence such as “contracts, work orders, or other similar corroborating evidence showing that the beneficiary will perform services in a specialty occupation at the third-party worksite(s), and that the petitioner will have an employer-employee relationship with the beneficiary”.

These new rules pose the potential for serious harm to both H-1B workers and the U.S. companies who employ them. Employers must file an extension for an H-1B worker whose status is expiring, but if they are not able to pay the employee the new, artificially inflated wages imposed by the DOL rule, the request for an extension may not be filed. Limitations in OES data have resulted in wages for some positions being entirely unavailable. For example, no wage data has been listed for a Software Developer, Systems in San Francisco since the new rule was promulgated on October 8, 2020. The default wage for Software Developer, Systems is $208,000. Similarly, little wage data is listed for physicians so they too must be paid the $208,000 default wage. Employers are forced to either pay the default wage, an exorbitant salary for many positions, or wait until wage data is available, potentially risking an untimely filing of the employee’s H-1B extension. If an extension is not filed, the H-1B employee would then be forced to rapidly depart the United States in the midst of a pandemic. Employers, particularly those in IT-related fields who employ numerous H-1B workers, who are unable to pay the new, substantially higher wages could be forced to lay off workers, or move their operations overseas. Foreign students graduating from US schools will not be hired by US employers if the entry level wage is ridiculously high. This will result in foreign students paying tuition fees to universities in other countries if their career prospects in the US will be diminished by these rules.  Nonprofits and startups will also find it impossible to pay these artificially inflated wages, which have no bearing whatsoever on the prevailing market wage.

Although litigation may soon challenge the new rules, putting U.S. employers in this difficult position for the time being does not bode well for the American economy’s chances of recovering from the effects of COVID-19. Forcing U.S. companies to reduce their workforce or move overseas to keep costs down also threatens the employment prospects of American workers who look to these same companies for jobs – ironic, as this is the very group whose interests the new rules are aimed at protecting.  Aspiring immigrants desire to come to America to succeed, and this in turn also benefits the US economy as they innovate and start or lead great companies. This is America’s secret sauce.  Nobody is denying that some aspects of the H-1B visa program should not be reformed, such as providing more job mobility to H-1B workers and providing them with a faster path to the green card, but these two new rules poison the secret sauce that keeps America so successful.

 

Kaitlyn Box graduated with a JD from Penn State Law in 2020, and works as a Law Clerk at Cyrus D. Mehta & Partners PLLC.