DHS proposes to modernize the definition of employers who are exempt from the annual statutory limit on H-1B visas to create more flexibility for nonprofit and governmental research organizations and beneficiaries who are not directly employed by a qualifying organization. Specifically, DHS proposes to change the definition of “nonprofit research organization” and “governmental research organization” by replacing “primarily engaged” and “primary mission” with “fundamental activity” to permit a nonprofit entity or governmental research organization that conducts research as a fundamental activity, but is not primarily engaged in research or where research is not a primary mission, to meet the definition of a nonprofit research entity.

Additionally, DHS proposes to revise the requirements for beneficiaries to qualify for H-1B cap exemption when they are not directly employed by a qualifying organization, but still provide essential work, even if their duties do not necessarily directly further the organization’s essential purpose.

DHS also proposes to provide flexibilities, such as automatically extending the duration of F-1 status, and any employment authorization granted under 8 CFR 274a.12(c)(3)(i)(B) or (C), until April 1 of the relevant fiscal year, rather than October 1 of the same fiscal year, to avoid disruptions in lawful status and employment authorization for F-1 students changing their status to H-1B. Additionally, DHS is proposing to clarify the requirements regarding the requested employment start date on H-1B cap-subject petitions to permit filing with requested start dates that are after October 1 of the relevant fiscal year, consistent with current USCIS policy.

DHS also proposes to address H-1B cap registration abuse by changing the way USCIS selects registrations. Instead of selecting by registration, USCIS would select registrations by unique beneficiary, thereby reducing the potential for gaming the process to increase chances for selection and helping ensure that each beneficiary would have the same chance of being selected, regardless of how many registrations are submitted on their behalf. DHS also proposes to clarify that related entities are prohibited from submitting multiple registrations for the same beneficiary, similar to the prohibition on related entities filing multiple cap-subject petitions for the same beneficiary for the same fiscal year’s numerical allocations.

Additionally, DHS proposes to codify USCIS’s ability to deny H-1B petitions or revoke an approved H-1B petition where the underlying registration contained a false attestation or was otherwise invalid. DHS further proposes to improve the integrity of the H-1B program by: (1) codifying its authority to request contracts; (2) requiring that the petitioner establish that it has an actual, non-speculative position in a specialty occupation available for the beneficiary as of the requested start date; (3) ensuring that the labor condition application (LCA) properly supports and corresponds with the petition; (4) revising the definition of “United States employer” by codifying the existing requirement that the petitioner has a bona fide job offer for the beneficiary to work within the United States as of the requested start date, consistent with current DHS policy; and (5) adding a requirement that the petitioner have a legal presence and be amenable to service of process in the United States.

DHS additionally proposes to clarify that beneficiary-owners may be eligible for H-1B status, while setting reasonable conditions for when the beneficiary owns a controlling interest in the petitioning entity. DHS also proposes to codify USCIS’s authority to conduct site visits and clarify that refusal to comply with site visits may result in denial or revocation of the petition. Additionally, DHS proposes to clarify that if an H-1B worker will be staffed to a third party, meaning they will be contracted to fill