US: Federal Regulators Tighten Rules on H-1B Visa Qualifications and Pay

Refinement of immigration rules continues in the United States with significant implications for employers in the coming months. In early October, the US Department of Homeland Security (DHS) announced an Interim Final Rule (IFR) that amends the H-1B visa program with tighter restrictions on qualifications. Namely, the IFR reduces the number of “specialty occupations” under which all applicants should fall, including a requirement that the job demands a bachelor’s degree or equivalent in a related field. Likewise, the parameters defining the employer-employee relationship have been expanded, and approvals are limited to one-year for situations where the actual work is done at a third-party site not owned by the visa petitioner. Finally, the criteria for demonstrating the work to be done (contracts and statements of work) may be stricter.

Along with the DHS rule, the US Department of Labor (DOL) issued a Prevailing Wages rule. The rule adjusts current regulations that require employers to pay workers under a visa program at rates comparable to those of US workers. It does this by setting the thresholds that define those prevailing rates much higher than previous levels. For example, an occupation with “prevailing wages” set at the 34th percentile in the past was reset by the update to the 62nd percentile. The revision applies to new and future applications. Employers that pay at or near the prevailing wage threshold for H1-B workers may have to raise their pay rates by 40 percent or more. Notably, several technology companies have filed suit to block the DOL ruling, as it would significantly impact workers in their industry. Future developments may have further implications related to this rule. The DHS rule takes effect on December 7, 2020, and the DOL wages rule went into effect on October 8, 2020.

Takeaway: For organizations that employ staff under the H-1B visa program, the new rules may have far-reaching implications on the cost and source of workers for many skilled roles and assignments. Working with internal resources, talent suppliers, and workforce solutions providers, organizations can develop a strategy to ensure a review of current and future H-1B worker visas to ensure compliance.

US: Federal Regulators Tighten Rules on H-1B Visa Qualifications and Pay

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