Higher Wages, Specialty Occupation, Client-Site Placements: New Rules For H1-B Visa Announced

In a continuing effort to stem the import and growth of foreign workers within the US labor market, the US government branches of the Department of Labor (DOL) together with the Department of Homeland Security (DHS) and the United States Citizenship and Immigration Services (USCIS) have released new regulations that will severely impact the H1-B visa program. These include higher, prohibitive wages to be offered by H1-B sponsoring employers, redefining specialty occupation and harder regulations against third-party placements. 

The US President has signed and passed a Bill towards Strengthening Wage Protections for the Temporary and Permanent Employment of Certain Aliens in the United States that is submitted and published in the Office of the Federal Register (OFR) as an Interim Final Rule with no opportunity for public comment.

Increased Wages

Effective immediately, the DOL has amended prevailing wage levels determined during the adjudication of the permanent labor certifications and Labor Condition Applications. This means that higher wages will prevail for all occupations levels.

  • A significant increase in wages will mean Level I (beginning level) employees will now have to get Level III (advanced, fully competent) wages to qualify for an h1-B visa. While it might sound great for those beneficiaries who do qualify, employers will have to reclassify job positions and will be deterred from the extra expense.
  • A similar hike is applied to green card applicant’s salaries. Employers will be discouraged to pursue permanent residency for its employees, if this is the mandatory salary to be issued.
  • Lastly, for all pending labor condition applications (LSAs) that were filed prior to today, October, 8, 2020 pending prevailing wage requests will be issued using the new wage data.

Specialty Occupation Redefined

“Specialty occupation” is defined by to have a 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, as a minimum for entry into the occupation in the U.S. 

Higher Wages, Specialty Occupation, Client-Site Placements: New Rules For H1-B Visa Announced
  • USCIS has redefined the meaning of specialty occupation to mean there should be a direct connection between the required degree and the responsibilities of the work-role.
  • There should be a specialization (majored in a specific subject) in the coursework as opposed to a ‘general’ degree in for example, engineering or MBA. This can be applied to multiple degrees.
  • USCIS require that a bachelor’s degree in a specific field must ALWAYS be required to meet the specialty occupation criteria.

As a result of this redefinition, some positions that have previously qualified for an H-1B visa may no longer be eligible. This will negatively impact H1-B visa renewals and extensions. 

Client-Site Placements

  • For all employees being placed in third-party sites called client office locations, will have their H1-B petitions approved only for 1 year.
  • USCIS will exercise more scrutiny over the employee/employer relationship to include supervision of the employee, his job duties and its benefits to the sponsoring employer. 
  • Required documentation: Master services agreement, work orders, client letters and project-related documentation.
  • Increased site visits by USCIS officers to randomly inspect the legitimacy of each foreign worker at a client site.

While the wage hike goes into effect immediately, the enforcement of employer-employee relationship and redefinition of specialty occupation will be implemented by December 7, 2020. If this goes into litigation, it might get delayed, else all affected parties should consider extensions and amendments wherever applicable.