United States: First Phase of Final H-1B Modernization Rule Introduces Changes to H-1B Cap Registration; FY 2025 Registration Period and H-1B Organizational Account “Live” Date Announced

The H-1B cap registration system will switch to a beneficiary-centric system, rather than the registration-centric system that has been in effect since 2020. Under the beneficiary-centric system, a foreign national’s passport or valid travel document will be required for an H-1B cap registration submission on their behalf. The passport or travel document will be used as the beneficiary’s unique identifier, serving as the means for their selection in the H-1B cap lottery. Each beneficiary will only be entered into the H-1B cap lottery selection process once, regardless of how many registrations were submitted on their behalf.

Under the new system, if a beneficiary is selected, each potential employer that filed a registration on that beneficiary’s behalf will be notified and eligible to file an H-1B cap petition for the beneficiary. By changing the selection process in this way, USCIS hopes to reduce the incentive for entities to collaborate to submit multiple registrations on behalf of the same foreign national and thereby unfairly increase a foreign national’s chance of selection in the H-1B cap lottery.

In order to implement this new beneficiary-centric system, several new rules will be in place, including:

• A foreign national will be required to use only one passport or travel document for all registrations filed on their behalf. If USCIS determines that registrations were submitted for the same foreign national using different identifying information, the agency may find those registrations invalid and deny or revoke any associated H-1B petition(s).
• A travel document may only be used in lieu of a passport where a foreign national is not able to be issued a passport, for example a stateless individual or refugee.
• Foreign nationals must register using the passport or travel document they plan to use to enter the United States, including if they are in the United States at the time of registration and will subsequently depart.
• At the H-1B filing stage, the H-1B petition must contain and be supported by the same identifying information that was provided in their selected registration. This means a copy of the passport used for registration must be included in the H-1B petition. However, USCIS has the discretion to permit changes in identifying information in instances including, but not limited to, a legal name change due to marriage, change in gender identify, or a change in passport number or expiration date due to renewal or replacement of a passport.

DHS has also tightened several other rules that combat misrepresentation or fraud in the H-1B process. Under the final rule:

• A prospective petitioner may only submit one registration per beneficiary in any fiscal year. This rule applied to H-1B petitions under the prior rule, and now extends to H-1B cap registrations.
• USCIS may deny or revoke the approval of an H-1B petition if it determines at any time that the H-1B cap registration fee is declined, not reconciled, disputed, or otherwise invalid.
• USCIS codifies its ability to deny or revoke an H petition if statements in the petition, corresponding H-1B registration, Labor Condition Application (LCA), or temporary labor certification are found to be inaccurate, misrepresented, or otherwise invalid. This includes circumstances where the attestations contained in an H-1B registration are determined to be false.

For now, DHS chose not to finalize its proposed prohibition on related entities filing registrations for the same foreign national in the same fiscal year. DHS says it may finalize this proposal in a subsequent final rule.  

USCIS plans to issue one or more subsequent rules on the remaining elements of the H-1B modernization proposed rule, including proposed changes to the definitions of H-1B specialty occupation, employer-employee relationship, bona fide H-1B employment, and cap-gap protection changes, among others.

DHS has stated that preventing misuse of the H-1B cap registration system is a high priority for the agency, and this first rule implements several measures aimed towards that goal. Employers should work closely with prospective FY 2025 H-1B cap beneficiaries to ensure they have valid passports or travel documents and that they are aware of the new parameters of the new beneficiary-centric system.

Though USCIS has announced the FY 2025 H-1B cap registration period of March 6 to March 22, and that the new H-1B organizational account system will become live on February 28, more information on FY 2025 H-1B cap changes is anticipated in the coming weeks.

Fragomen is closely following developments related to H-1B modernization and process changes, and will provide updates as they become available.