Department of Homeland Security Proposes Restrictive H-1B Regulation to Codify Its Highly Disputed Adjudicatory Practices

Obermayer Rebmann Maxwell & Hippel LLP

Obermayer Rebmann Maxwell & Hippel LLP

Earlier this month, the Department of Homeland Security (“DHS”) submitted to the Office of Management and Budget (“OMB”) regulations that are anticipated to be highly restrictive and far-reaching.  The proposed regulations would codify major changes in how the agency interprets and applies H-1B specialty occupation and other rules in adjudicating H-1B nonimmigrant visa petitions filed with U.S. Citizenship & Immigration Services (“USCIS”). The title of the proposed rule is “Strengthening the H-1B Nonimmigrant Visa Classification Program.” DHS plans to issue the regulation as an interim final rule with immediate or near-immediate impact by bypassing the normal rulemaking process in which a final rule is published after a mandatory public notice and comment period where stakeholders get to weigh in on the rule and its impacts.  The bypass interim final rule procedure would mean that employers and other members of the public would not have an opportunity to provide feedback before the rule takes effect.

While the precise contents of the regulation remain confidential until released for publication, USCIS has made it more difficult to qualify for and obtain an H-1B visa through its re-interpretation of longstanding agency definitions and policies. The push for regulatory change comes as no surprise as several of these USCIS drastic policy shifts have been the subject of federal litigation—with USCIS on the losing end. For example, as a part of the settlements in cases ITServe Alliance, Inc. v. Cissna and Serenity Info Tech et al. v. Kenneth T. Cuccinelli, USCIS was obligated to rescind its 2018 Contract and Itinerary Memorandum  (PM-602-0157) as well as the 2010 Employer-Employee Relationship Memorandum (HQ 70/6.2.8 (AD 10-24)). These policies severely elevated the burden of production and requirements for employers seeking to place their H-1B workers at third-party worksites—a common practice for organizations in the IT staffing/consulting space—by imposing novel and stringent requirements such as submission of itineraries with micro-location information, overly burdensome details about each specific assignment the worker would be assigned to over the course of a 3 year validity period, and invasive evidence concerning the establishment of an employer-employee relationship for the duration of the H-1B validity period. These novel policies resulted in both increased denials, and strange practices such as issuing H-1B approvals with truncated validity periods. Additionally, based on these policy memoranda, worksite enforcement actions by DHS compliance officers also increased. In both cases, the federal judges determined that USCIS’s dramatically new interpretations of existing regulations were unlawful and directed that proper rule making procedures be followed if the agency sought to implement such changes that departed from longstanding agency policies and regulatory stances.

Additionally, the new proposed regulations seek to redefine a “specialty occupation,” which lies at the epicenter of H-1B visa eligibility. Broadly speaking, the plain language of the relevant statutes/regulations, together with USCIS’ longstanding interpretation and application of these rules, mandates that an H-1B position require the “theoretical and practical application of a body of highly specialized knowledge […], [as well as] the attainment of a bachelor’s degree or higher in the specific specialty, or its equivalent, as a minimum for entry into the occupation in the United States.” For decades, USCIS interpreted and applied this policy as meaning that an offered position must require a bachelor’s degree or equivalent in a field related to the job. However, during the last four years, USCIS’ application of this rule has morphed into  stance that an H-1B position must require a degree in one and only one major/field of study, which totally ignores the overriding language in the Immigration and Nationality Act, which states that it is the “body of knowledge” entailed that is determinative. For example, in the real world, a person could qualify for job in finance through several majors that prepare them with the core body of knowledge needed to perform such a job, such as finance, business administration, economics, accounting, mathematics, and even engineering disciplines. However, per recent USCIS practices, a job accepting such academic credentials, can often fail to qualify as a specialty occupation because it accepts too many different degree majors instead of just one discipline. In such a case, USCIS would likely require the employer to explain and document in detail precisely how and why each degree field is directly related to the job duties, putting excessive burden on employers and drastically recasting what it takes to qualify as a “specialty occupation.”

These trends, and more, have resulted in large increases in the incidence rate of issuance of Requests for Evidence (“RFE”) and visa denials compared to prior years. In fact, the proposed regulations seek to officially enshrine these informal adjudicative practices to avoid further reversals by the judiciary. Several federal courts have struck down USCIS’s novel interpretations and requirements as unlawful.  Most recently, in Madkudu Inc. v. USCIS (N.D. Ca), a federal judge is allowing the claims of many to move forward in a case alleging that USCIS has routinely denied H-1B cases for market research analyst roles for not qualifying as a specialty occupation under the policies discussed above.

In sum, the immigration landscape has become much more complex and tougher to navigate for employers seeking to sponsor foreign nationals.  These far-reaching changes have made it much more difficult for employers to predict and institute reliable hiring plans, as outcomes with USCIS have become unpredictable.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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