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H-1B Visa Program Updates: Two Changes Your Company Needs to Know

By February 10, 2021September 5th, 2022No Comments
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In October 2020, The United States Department of Labor (DOL) and Department of Homeland Security (DHS) announced a new restriction to the H-1B worker visa program. Before the rule change, companies hiring overseas workers used a lottery system to apply for the H-1B worker visas. The October 2020 rule replaced the lottery with a wage-based system that increased costs for companies looking to hire H-1B workers. 

In late January, the Biden administration announced it was halting the implementation of the new lottery-based rule. The administration also added extra protection to the H-4 EAD program, which allows spouses of H-1B visa holders to legally work in the United States. Read on to learn what your company needs to know about the changes to these two immigration laws.  

What Is an H-1B Visa?  

The H-1B visa is designed to allow U.S. employers to legally hire skilled foreign workers. Employers apply for H-1B visas to hire employees in technical occupations such as IT, engineering, science, mathematics, robotics, AI, and similar fields. 

H-1B visas last for three years, but employers can petition to extend them for up to six years. Employers and employees seeking H-1B visas generally move through the application process faster than they would when applying for a green card. The relatively shorter application process, along with the three- or six-year time limit, makes the H-1B visa popular for employers that need to quickly and legally hire a foreign worker for a finite amount of time. Many employers hire workers on an H-1B visa while the employee seeks a path to permanent work eligibility in the country, whether through a green card, citizenship, or other avenues.

Employees must have at least a bachelor’s degree to qualify for an H-1B visa. The October 2020 H-1B updates tightened the qualification standards for applicants. The updates required that an employee’s bachelor’s degree be directly related to the job for which they were applying. For example, suppose a fintech company wanted to sponsor an H-1B worker. To qualify for a visa, the employee must have a degree in finance, economics, or another field directly related to their specific job. 

How Do the Latest Changes Affect the H-1B Visa Program?

The Biden administration’s actions preserve the H-1B lottery-based application system rather than switching to the wage-based application system. As of October 2020, the wage-based system was set to take effect on March 15. Under the Biden administration’s recently announced ruling, the lottery system will remain in effect through 2021

By extending the lottery system, the government makes life easier for U.S. companies looking to sponsor H-1B visa workers. The wage-based system would have increased employer costs for H-1B employees by up to 30%

Companies must pay close attention to future changes to the application system. The DHS announced that it would use the rest of the year to explore alternatives to the lottery- and wage-based H-1B application systems. Preserving the current system for the rest of 2021 gives the Biden administration “more time to develop, test, and implement the modifications to the H-1B registration system and selection process,” according to a DHS press release. As a result, companies should expect clarity about whether the government will implement a new application system or preserve the current system by the end of this year. 

What Is an H-4 EAD Visa?

Along with extending the H-1B visa lottery system, The Biden administration added additional protection to the H-4 EAD visa program. The H-4 EAD visa grants spouses of H-1B visa holders the right to work in the U.S. 

The U.S. government implemented the H-4 EAD visa program in 2015 to help companies improve their ability to retain H-1B visa workers. Before the program was introduced, H-1B visa holders were at risk of leaving the U.S. because their spouses could not legally work in the country. León Rodríguez, Director of United States Citizenship and Immigration Services (UCSIS) when the H-4 EAD program was introduced, said, “Allowing the spouses of these visa holders to legally work in the United States makes perfect sense. It helps U.S. businesses keep their highly skilled workers by increasing the chances these workers will choose to stay in this country during the transition from temporary workers to permanent residents.”

How Do the Latest Changes Affect the H-4 EAD Visa Program? 

In 2019, the Trump administration introduced a proposal to eliminate the H-4 EAD program. Until late January of 2021, the Office of Management and Budget (OMB) and the Office of Information and Regulatory Affairs (OIRA) were reviewing the proposal—allowing for the possibility of its adoption. 

The Biden administration withdrew the proposal on January 25, 2021. In doing so, the administration gave H-4 EAD workers a new sense of security regarding their legal work status in the U.S. There are currently over 100,000 H-4 EAD visa holders in the U.S.

The added protection of the H-4 EAD program is also good news for U.S. employers. Companies that sponsor these workers have peace of mind they can continue to legally employ them without having to navigate a new immigration system or risk losing the employees altogether. Companies that rely on H-1B visa workers also gain confidence that their employees’ spouses can legally continue to work in the U.S., which decreases the risk of companies losing skilled foreign workers. 

Navigate Every Immigration Law Change With an International Expert

HR and legal teams must stay vigilant to remain up-to-date on changing immigration laws. Whether your company employs foreign workers in the U.S. or oversees a global workforce across international markets, remaining compliant with ever-evolving local labor laws is an ongoing process—but it doesn’t have to be challenging.

Velocity Global’s international employment experts simplify workforce compliance for companies across the globe. Our teams are dedicated to staying ahead of changing labor regulations in the U.S. and over 185 countries worldwide, so companies like yours avoid the fines, legal fees, and business interruptions that come with falling out of compliance.

Reach out to Velocity Global today to find out how we can help your team remove the burden of tracking and interpreting complex international employment laws.