A shift in political tides often brings with it changes in the way we do business. Changes in immigration policy have a significant impact on the staffing and recruiting industry, particularly given the ongoing shortage of qualified candidates in many fields. With H-1B visa policies under discussion and potential changes on the horizon, it’s crucial to understand how these shifts could affect your business.

Bracing for change

Michael Hammond, Attorney with Corporate Immigration Partners, is aware of the concerns surrounding the H-1B program, especially in light of policy changes over recent years. Some of these changes—such as guidance on the employer-employee relationship—trace back to the Neufeld Memorandum of January 2010. More recent adjustments, including increased prevailing wages and the removal of the deference rule for visa extensions, have contributed to higher denial rates and greater uncertainty for employers. 

Despite these challenges, Hammond remains cautiously optimistic. There is potential for new immigration legislation to be tied to border security measures, though its impact on the industry remains uncertain. Additionally, several influential figures in the technology sector have expressed strong support for high-skilled immigration, which may shape future policy decisions. Given these dynamics, there is a possibility that the H-1B program will remain largely unchanged in the coming years. 

The H-1B Modernization Rule

This rule came into effect on January 17, after a lengthy period of consideration. “It was proposed initially in October 2023, and went through the complete notice and comment period,” Hammond says. “It clarifies a lot of existing policies, and puts them in a regulatory format.”

Staffing company leaders should be aware of the key changes in this rule. These changes are in the following areas:

• • Definition of employer
    • Formerly, the definition was that an employer ‘controlled the work of an employee’. Now it only requires that the company has bona fide work for that person. Remote and offsite work – where it could be argued that there wasn’t control of the work – are now included.
  • Definition of specialty occupation
    • This is now only available for people with a bachelor’s degree that is directly related to the job, and only when the job requires it. Interestingly, the rule specifically references third-party requirements, distinguishing between staff augmentation and solutions work.
  • Cap Gap
    • This extension relates to the gap between the end of F-1 OPT or STEM OPT (where the OPT card expires in May) and the start of H-1B status (which doesn’t come into effect until October 1). The rule extends the Cap Gap beyond October 1, provided that the case is still pending.
  • Amended petition
    • It was always the case that employers had to file an amended petition when there was a material change in the employee’s job, including a change in work location that is outside commuting distance. Under the new rule, the employer must file before the move. If this isn’t done in time, the employee must stop working until the application is approved.
  • Deference policy
    • The H-1B deference policy was reinstated in 2021, and is codified in the rule. Under the policy, USCIS defers to prior approval decisions.
  • Itinerary requirement

There is no longer a requirement to provide details as to the exact dates and locations of work for the entire duration of the validity period.

Shrinking talent pool

Although the changes brought about by the H-1B Modernization Rule may be net neutral for businesses in the staffing sector, Hammond warns that other possible future changes to immigration legislation may still have an impact.

In particular, Hammond notes that your firm may have international workers whose classes may be at risk of elimination. These may include employees who aren’t on an H-1B, who qualified for I-9, and who therefore may not be on your radar as a risk factor. These may include:

• TPS (Temporary Protected Status)
• Asylum
• DACA (Deferred Action for Childhood Arrivals)
• H4 EAD
• L2
• CPT (Curricular Practical Training)

If you have employees in this class, it may be especially important to register them in the H-1B lottery.