United States: Final Rule on H-1B Modernization Clears Federal Review; Cap Registration Changes Anticipated

A Department of Homeland Security (DHS) final regulation that is expected to implement at least some of the provisions contained in the H-1B modernization proposal released in October has cleared the federal review process, bringing the rule closer to publication and implementation. The rule has moved quickly through the review process, having been submitted to the Office of Management and Budget (OMB) less than two weeks ago. DHS has said that it may finalize and implement its H-1B modernization program in stages through one or more final rules, with some provisions possibly taking effect before the FY 2025 H-1B cap process begins in March 2024.

The specific contents of this final regulation are unknown and will remain so until the rule is released for publication in the Federal Register. However, DHS has stated that preventing misuse of the H-1B cap registration system is a high priority for the agency, and with the FY 2025 H-1B cap season approaching, this final rule is likely to include the switch to a beneficiary-centric (rather than registration-centric) H-1B cap selection system set forth in the proposed rule, as well as general anti-fraud provisions that strengthen DHS’s ability to deny or revoke H-1B petitions and invalidate registrations that fail to comply with the new rules.

DHS accepted public comments on the proposed version of the H-1B modernization rule from late October 2023 to late December 2023. The final rule could contain modifications to the proposed rule, in response to public comments.