H-1B visa revamped from Jan 17: Key changes employers, applicants must know

The United States on Tuesday introduced reforms to the H-1B visa programme, a move that is likely to benefit thousands of Indian tech professionals.

 

The most sought-after H-1B visa is a non-immigrant visa that allows US companies to employ foreign workers in speciality occupations that require theoretical or technical expertise. In 2023, Indian nationals accounted for 72.3% of the 386,000 visas issued under the programme.

 

The changes, finalised by the US Department of Homeland Security (DHS), aim to modernise the programme, offer flexibility to employers, and streamline the process for skilled foreign workers.

 

“These improvements to the programme provide employers with greater flexibility to hire global talent, boost our economic competitiveness, and allow highly skilled workers to continue advancing American innovation,” said Alejandro N Mayorkas, Secretary of Homeland Security.

 

The updated rules will take effect on January 17, 2025.

 

Key changes introduced in H-1B programme

 

1. Modernised definitions for cap-exempt organisations

Nonprofit and governmental research organisations now qualify as cap-exempt if their "fundamental activity" is research. The updated definition replaces the previously unclear criteria of being “primarily engaged” in research.

 

2. Improved transition for F-1 visa holders

Students on F-1 visas shifting to H-1B status will experience fewer disruptions in legal status and employment authorisation.

 

3. Faster processing for visa extensions

USCIS will speed up the processing of applications for those who have previously been approved for H-1B visas.

 

4. New flexibility for employers

Employers can hire H-1B workers based on specific business needs

 

5. Eligibility for individuals with controlling interest

H-1B holders with a controlling interest in their petitioning organisation can qualify, provided certain conditions are met.

 

6. Stronger oversight to prevent misuse

USCIS will now conduct inspections, impose penalties for non-compliance, and verify that job roles meet all requirements.

 

7. Revised Form I-129

From 17 January 2025, a new version of the petition form will be required for all applications.

 

8. Cap exemptions and year-round petitions

Cap-exempt organisations can submit petitions year-round without facing numerical limits.

 

9. Lottery system abuse prevention

Measures have been introduced to reduce abuse by organisations flooding the system with bulk applications, improving fairness for legitimate applicants.

 

Technology companies depend on it to hire tens of thousands of employees each year from countries like India and China.

 

“American businesses rely on the H-1B visa programme for the recruitment of highly-skilled talent, benefiting communities across the country,” said Secretary of Homeland Security Alejandro N. Mayorkas.

 

“These improvements to the programme provide employers with greater flexibility to hire global talent, boost our economic competitiveness, and allow highly skilled workers to continue to advance American innovation,” he said.

 

“The H-1B programme was created by Congress in 1990, and there's no question it needed to be modernised to support our nation's growing economy,” said USCIS Director Ur M. Jaddou.

 

The changes made in the final rule will ensure that US employers can hire highly skilled workers they need to grow and innovate while enhancing the integrity of the programme, he said.

 

In order to implement the rule, a new edition of Form I-129, Petition for a Nonimmigrant Worker, will be required for all petitions beginning January 17, 2025, which is the rule's effective date.

 

The DHS through USCIS is legally limited to awarding 65,000 H-1Bs per year, with an additional 20,000 for applicants with advanced degrees, but many nonprofits are exempt from that cap.

 

H-1B petitions subject to the cap regularly exceed the number of legally available visas, which are issued annually at the start of the fiscal year. Applicants are chosen by a lottery system for review, meaning eligible applicants are often denied due to chance.

 

Cap-exempt organisations can petition for H-1Bs year-round, and they are not subject to a statutory limit, the Hill reported.

 

Under the new rule, nonprofit and governmental research organisations will be defined as those whose “fundamental activity” is research, rather than the previous “primarily engaged” or “primary mission” definitions, which led to confusion regarding which organisations were exempt from the cap and which were not, the report added.

 

The H-1B programme has previously come under criticism for being susceptible to abuse in large part by organisations that flood the application system, lowering the chances of applicants subject to the cap lottery.

 

Decline in approvals among major employers

 

  The changes may help reverse the decline in H-1B sponsorship approvals. Reportedly, Amazon, the largest sponsor, saw approvals drop from more than 11,000 in 2023 to just over 7,000 in 2024. Indian IT companies, including Infosys and Tata Consultancy Services, also experienced fewer approvals.

 

Infosys' approvals dropped from over 7,300 to around 5,900, while TCS saw a decrease of 1,600 approvals. In contrast, Meta reported an increase of 400 approvals, driven by its focus on virtual and augmented reality technologies.

 

Piyush Gupta, vice president for India and the Middle East at CanAm Enterprises, noted that the lottery system creates uncertainty. “Many firms are hesitant to engage with the unpredictable lottery process,” he said. “Families are also exploring stable alternatives like the EB-5 programme, which provides a pathway to US residency through investment.”