Introduction to the Regulation and H-1B Program

The H-1B visa program, a cornerstone of employment-based nonimmigrant immigration, enables U.S. employers to hire foreign workers for specialty occupations that require theoretical and practical expertise in a specific field. Defined under the Immigration and Nationality Act (INA), these roles demand a bachelor’s degree or higher in the relevant specialty. Over time, the program has faced scrutiny regarding its susceptibility to abuse and fraud, leading to measures aimed at safeguarding its integrity.

In its final rule, effective January 17, 2025, the Department of Homeland Security (DHS) introduced key amendments to modernize the H-1B program, streamline processes, and enhance oversight. The new regulation had three key target points: Modernization and Efficiencies, Providing Greater Benefits and Flexibilities, and Strengthening Program Integrity. Our firm has articles on the other sections, and this article explores the “Program Integrity” section of the new regulation, focusing on provisions designed to ensure that H-1B petitions reflect bona fide job offers, reinforce compliance, and address third-party worksite placements. These measures not only aim to protect U.S. labor markets but also strengthen the program’s credibility.

Program Integrity Overview

DHS emails to keep program integrity as a critical pillar of the new regulation, emphasizing accountability and transparency among petitioners and beneficiaries. By instituting robust mechanisms, DHS aims to verify that H-1B petitions align with statutory requirements and serve legitimate workforce needs. Key elements of the rule target bona fide job offers, employer-employee relationships, labor condition applications (LCAs), mandatory site visits, and third-party placements.

1. Provisions to Ensure Bona Fide Job Offers for Specialty Occupations

i. Contracts

Under 8 C.F.R. §214.2(h)(4)(iv)(C), DHS now requires petitioners that place employees at third-party end-clients to provide contracts or equivalent evidence demonstrating the bona fide nature of a position. This requirement addresses instances where insufficient documentation obscures job legitimacy. Contracts or similar documentation should outline job duties, work location, and terms of employment to substantiate the specialty occupation’s validity and its connection to the beneficiary’s qualifications. DHS recognizes that contracts or work orders may not have these items, and would accept alternative evidence such as end-client letters that provide the information.

While not fully implementing the 2010 Neufeld Memo and the 2018 USCIS memorandum on third-party placements, which emphasized the importance of contracts to demonstrate control and the nature of the work to be performed, USCIS is going back to this route for proving specialty occupation as it believes that when one is placed at an end-client, the end-client requirements may be more important for determining specialty occupation.

Unlike earlier implementations of the 2018 memorandum, however, this rule avoids imposing restrictions that would lead to short-term approvals, which were previously criticized for creating administrative burdens and disrupting business operations. By explicitly focusing on the bona fide nature of the position and the terms of employment, the regulation aims to strike a balance between oversight and operational flexibility for employers. USCIS views The inclusion of clear contract requirements ensures transparency while offering sufficient flexibility for employers operating in dynamic industries. Moreover, the provision fosters clarity in adjudications by providing USCIS with direct evidence of the job’s nature, eliminating ambiguities often associated with roles at third-party worksites.

ii. Bona Fide Employment

Petitioners must establish that a bona fide employment opportunity exists at the time of filing. The regulation replaces “non-speculative employment” with “bona fide employment,” clarifying that the offered position must be genuine and available on the petition’s requested start date. Furthermore, DHS emphasizes that while specific day-to-day assignments need not be identified, the overall scope and specialty nature of the position must be substantiated. The new relevant regulatory language will read “at the time of filing, the petitioner must establish that it has a bona fide position available for the beneficiary as of the start date of the validity period as requested on the petition.”

This requirement seeks to ensure that employment opportunities are not artificially created to exploit the H-1B program. Petitioners must present evidence such as organizational charts, job descriptions, and proof of business operations to demonstrate the authenticity of the employment opportunity. The regulation also acknowledges the dynamic nature of business operations by allowing flexibility in day-to-day assignments, provided the core role aligns with the petition’s terms. By preventing speculative filings, DHS seeks to strengthen the program’s foundation, ensuring that it serves its intended purpose for specialty fields. Additionally, this approach enhances protections for both U.S. workers and foreign beneficiaries by ensuring compliance with established labor market standards.

iii. LCA Properly Corresponds with the Petition

Ensuring consistency between the Labor Condition Application (LCA) and the H-1B petition is a critical requirement that already exists and will continue under the new regulation. The LCA must accurately reflect the job title, location, and wage level, as these elements are central to establishing the position’s legitimacy and compliance with Department of Labor (DOL) standards. Inconsistencies between the LCA and petition can result in rejection or revocation, as they may indicate potential fraud or non-compliance. This provision strengthens the alignment of employer obligations with regulatory expectations, ensuring fair treatment of foreign workers.

Companies can expect that USCIS will be reviewing the dopcumentation to ensure the proper SOC code was selected, that the proper wage level was selected, and the terms and conditions all match. The proper wage level must be analyzed in accordance with DOL guidance to ensure there is not artificial under payment.

The focus on LCA alignment also reduces the risk of wage suppression, a concern frequently raised by critics of the H-1B program. By mandating transparency and accountability in wage-related documentation, DHS promotes equity within the U.S. labor market. Petitioners are encouraged to maintain meticulous records, which also serve to facilitate smoother audits and site visits.

iv. Revising the Definition of U.S. Employer

DHS has updated the definition of “United States employer” to codify existing policies, emphasizing that petitioners must demonstrate a bona fide job offer and the capacity to fulfill their obligations. Employers must maintain a legal presence in the U.S. and be amenable to service of process, enhancing accountability and compliance. This change is particularly significant for companies operating in remote or hybrid work environments, where traditional definitions of employment relationships are evolving.

This revised definition not only addresses modern business practices but also enhances program integrity by reducing opportunities for fraud. By requiring evidence of a legitimate business presence, the regulation ensures that petitioners are actively engaged in lawful operations within the U.S. The provision also establishes clear guidelines for adjudicators, facilitating consistent and fair evaluations of employer eligibility.

USCIS will be removing aspects of the employer-employee guidance that it has that focuses on the right to control, and instead pivot to the bona fide job offer requirement. The new regulation codifies the factors USCIS considers in determining whether an employer-employee relationship exists.

vi. Bona Fide Job Offer

The bona fide job offer requirement reinforces that positions must genuinely require a beneficiary’s specialized skills. Employers must substantiate their need for the role with evidence such as business plans, hiring records, and operational documents. This provision helps prevent fraudulent filings intended to exploit the H-1B process and ensures that only legitimate opportunities are made available to foreign workers. The focus on bona fide offers also underscores the importance of aligning program outcomes with the statutory goal of addressing specialized labor needs.

2. Beneficiary Owners

Under the new rule, beneficiary owners of petitioning entities—those holding controlling interest—are subject to stricter parameters. Initial petitions and extensions are limited to 18 months, providing additional oversight for cases where ownership may obscure traditional employer-employee dynamics. The 18 month validity will apply for the initial H-1B petition and the first extension. After that, you can get the 3 year extensions if available. DHS defines controlling interest as ownership of more than 50% or majority voting rights in the petitioner.

This provision has been and will be discussed in more detail in other Reddy Neumann Brown PC articles, but this provision will allow an individual to remain in H-1B while performing specialty occupation work the majority of the time (i.e. 51% or more) and running the business the minority of the time (i.e. 49% or less). From a program integrity standpoint, USCIS views that by limiting approval durations and requiring additional scrutiny, DHS aims to prevent misuse of the H-1B program by individuals who may prioritize personal benefits over compliance. Petitioners must provide detailed ownership and organizational documentation, ensuring transparency and compliance with regulatory standards. This additional oversight ensures that beneficiary-owner cases are held to the same rigorous standards as other H-1B petitions, preserving program equity and integrity.

3. Site Visits

USCIS expands its authority to conduct site visits to verify petition compliance. Refusal to comply with site visits may result in denial or revocation of the petition. These visits aim to confirm the existence of work locations, job duties, and adherence to regulatory requirements. The use of site visit findings as evidence in adjudications enhances USCIS’ ability to detect and address fraud.

The new regulation makes site visits mandatory, emphasizing their importance as a cornerstone of program integrity. Employers must cooperate fully during site visits, providing timely access to records, facilities, and personnel. Non-compliance, such as refusal to participate or obstruction of the visit, can lead to significant consequences, including denial of current and future petitions. This approach underscores the program’s zero-tolerance stance on fraud and non-compliance, ensuring that bad actors cannot exploit the system. Site visits also act as a deterrent, signaling to petitioners the importance of maintaining accurate and up-to-date records to support their petitions. Furthermore, site visits help establish a comprehensive compliance framework by collecting on-the-ground evidence of operational practices.

4. Third-Party Placement

Codifying the precedent set by Defensor v. Meissner, the regulation specifies that when H-1B workers are placed at third-party worksites, the specialty occupation’s requirements are assessed based on the third party’s needs. Employers must provide additional evidence, including contracts and detailed descriptions of the work to be performed, to validate that the third-party placement aligns with H-1B requirements. This provision ensures that the program’s purpose—to fill critical specialty roles—is upheld.

Future Impact and Conclusion

The “Program Integrity” measures introduced in the new H-1B regulation represent a significant step toward restoring trust in the program. By ensuring bona fide job offers, reinforcing the employer-employee relationship, and enhancing oversight, DHS addresses longstanding vulnerabilities that undermined the program’s objectives. Employers and beneficiaries must prepare for increased documentation requirements and embrace transparency to ensure compliance.

These reforms not only safeguard opportunities for highly skilled foreign workers but also reinforce the H-1B visa’s role as a vital tool for fostering innovation and economic growth in the U.S. As DHS continues to refine the program, stakeholders can expect a more resilient and equitable framework that aligns with both regulatory mandates and national workforce priorities.

In conclusion, certain provisions of the new H-1B regulations represent a significant step towards ensuring greater integrity and fraud detection in the H-1B program. Employers can expect more scrutiny and site visits, especially as it comes with third-party placement.

Please see additional articles on Reddy Neumann Brown’s blog that delve into the other two key areas of the new rules: “Enhancing Benefits and Flexibilities” and “Clarifying Requirements and Improving Program Efficiencies.”

By : Steven Brown

Steven Brown is a Partner at Reddy Neumann Brown PC where he works in the Non-immigrant visa department and leads the Litigation Team. His practice covers all phases of the non-immigration visa process including filing H-1B, L-1, E-3, H-4, and H-4 EAD petitions. In the last two years, Steven has successfully handled over 1,000 non-immigrant visa petitions including filing petitions, responding to any necessary Requests for Evidence, and drafting motions and appeals. He has also become a key resource for F-1 students that seek guidance on properly complying with the F-1 visa regulations and any OPT or CPT issues they may have. Additionally, Steven holds a weekly conference call for companies that are part of one of the largest organizations for IT Services companies in America.