Rishi P. Oza, Esq.
The waning weeks of the Biden Administration were relatively quiet on most policy fronts, but were somewhat seismic with respect to a few areas of immigration law. While the Trump Administration was vocal on its intent to enact a mass deportation once he was back in the White House, the Biden Administration quietly released an amendment to the Code of Federal Regulations that may have major implications on the current immigration framework.
The amendment, which can be found here, went into effect on January 17, 2025. The new rule has made some significant changes by:
- Extending the current CAP-gap period for those individuals moving from F-1 status to H-1B.
- Clarifying the H-1B definition of “specialty occupation” to be more expansive in USCIS interpretation of what constitutes an H-1B qualifying job position.
- Codifying DHS’ position under the Biden Administration of providing deference to previous decision when adjudicating a subsequent filing for the same applicants and the same underlying facts.
- Clarifying that certain business owners may be eligible for H-1B status, even when they have a controlling interest in the business.
Each of these changes have the ability to significantly impact individuals currently in the United States. Foremost, the extension of the F-1 CAP-gap period is of importance to those seeking to change to H-1B status. Currently, F-1 students are eligible to apply for Optional Practical Training (OPT), which is a complicated way of stating that upon graduation, a student is given temporary employment authorization. Historically, OPT starts when an individual graduates and expires one year later. This leads to a common problem of an individual’s OPT expiring in the summer months of a given year (most students graduate in May/June, so their OPT will usually expire in May/June of the following year). These same individuals would apply for H-1Bs under the CAP-lottery system, but would have a gap in their ability to work while waiting for a decision from USCIS on their respective H-1B filings. In response, USCIS created the CAP-gap extension, which allowed these individuals to continue to work, despite the expiration of their work authorization, through October 1 of a given year, which is when an individual’s H-1B would theoretically take over. However, as a result of processing delays, USCIS often does not have individual H-1B adjudicated by October 1st of a given year. This regulatory change extends an individual’s ability to work through April 1 of the following year and effectively provides those same individuals with an additional six months of potential work authorization. This extension expires upon the adjudication of the H-1B application (with either an approval or denial).
While the clarifications of “specialty occupation” and the codification of DHS’ deference policies are important, the real eye-opening change was DHS’ indication that it would allow for business owners to submit H-1B applications on their own behalf even if they have a controlling interest in the business. As has been a fundamental rule for H-1B filings, individuals cannot “self-sponsor” for H-1B status and an employer must establish an “employer-employee” relationship. DHS now indicates that “[t]here is nothing in the statute prohibiting a noncitizen with an ownership interest in a U.S. employer from being the beneficiary of an H-1B petition filed by that employer.” DHS has indicated a concern about abuse for the program, but has stated that the agency has created specific conditions that would ensure the propriety of the program, including “the requirement that the beneficiary must perform specialty occupation duties a majority of the time and shortened validity periods for the initial petition and first extension of 18 months.” DHS has indicated that “even if a beneficiary is a sole owner of a business, that business may still file an H-1B petition as a ‘United States employer’ if the business…has a bona fide job offer of employment, has a legal presence in the United States and is amenable to service of process, has an IRS tax identification number, and, if the beneficiary has a controlling interest in the petitioner, the beneficiary will perform specialty occupation duties a majority of the time, consistent with the terms of the H-1B petition.”
This amounts to a titanic shift in prospects for motivated and entrepreneurs seeking to open their own business and ventures. How this new set of rules will be interpreted by the Trump Administration will be an open question, but the change provides much-needed flexibility to an immigration system that has too often been slow to respond to the everchanging needs of our dynamic American economy. In the best-case scenario, these changes will be a boon for those interested in starting up their own entities and willing to invest in the success of their respective businesses. One can continue to hope that DHS looks to forward-thinking ways in which to build a more vibrant and responsive immigration system to meet the moment of ongoing change to our economy.
