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

A final DHS regulation that will change the H-1B cap registration system to a beneficiary-centric system will be in effect for the FY 2025 H-1B cap registration period, which will run from noon ET on March 6 to noon ET on March 22. The final rule also includes anti-fraud measures that enhance DHS’s ability to deny and revoke H petitions based on false statements or invalid registrations. The full H-1B modernization rule will be implemented through one or more final rules, with some provisions still under development. USCIS has also announced that the agency’s new organizational account system will go live at noon ET on February 28.

The issue

A Department of Homeland Security (DHS) final regulation that will change the H-1B cap registration selection process to selection by beneficiary rather than registration, and aims to strengthen H-1B fraud prevention measures, is set to be published on February 2 and take effect 30 days later. This final rule introduces several changes to the H-1B cap process, all of which will be in place before the FY 2025 H-1B cap registration system opens.

The new final rule will implement only some of the provisions contained in the H-1B modernization proposal released in October. One or more future final regulations to implement the full H-1B modernization program are expected.

USCIS has also announced that the FY 2025 H-1B cap registration period will run from noon ET, March 6 to noon ET, March 22. USCIS’s new online organizational account system will also be in effect for the FY 2025 H-1B cap registration period, and will go live at noon ET on February 28. Employers will be able to create new accounts in the system and current account holders will be able to upgrade their existing accounts, beginning on February 28. USCIS has issued some limited information about the new account system and a related e-filing function, and is expected to provide more detail in the coming weeks.

Switch to a beneficiary-centric H-1B cap registration system

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.

Strengthening DHS’s ability to deny or revoke H-1B petitions and invalidate registrations

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.  

H-1B modernization provisions not included in this 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.

What the final rule means for employers and foreign nationals

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.