Trump Pushes Next H-1B Rule to Tighten Eligibility and Oversight

The Department of Homeland Security’s latest regulatory agenda signals a major push to reshape how the H‑1B visa works, with a proposed rule titled “Reforming the H-1B Nonimmigrant Visa Classification Program” slated for possible publication in December 2025. The agenda summary says DHS will consider revising eligibility for cap exemptions, increasing oversight of third‑party placements, and adding scrutiny for employers that violate program rules, among other steps.

For employers and high‑skilled foreign nationals planning careers in the United States 🇺🇸, this means a multi‑stage journey from policy announcement to implementation, with new compliance checkpoints at each step and a likely focus on wage protections and job classification standards.

The regulatory purpose and immediate implications

DHS frames the rulemaking goal as improving the integrity of the H‑1B program and better protecting U.S. workers’ wages and working conditions. In practice, expect:

• Closer review of how positions meet specialty occupation criteria.
• More scrutiny of how wages compare to U.S. professionals with similar experience.
• Tighter oversight of vendor‑client and third‑party placement structures.

Key program facts to keep front of mind:

• H‑1B annual limit: 65,000, plus 20,000 for U.S. master’s or higher degrees.
• International students constitute 73% of full‑time graduate students in electrical and computer engineering at U.S. universities — illustrating how DHS rules shape the talent pipeline.

Legal and historical context:

• The Trump administration’s policies produced historically high H‑1B denial rates until lawsuits and a legal settlement reversed some practices.
• A previous H‑1B change published on October 8, 2020 was blocked in court for violating the Administrative Procedure Act.
• The U.S. Supreme Court’s June 2024 decision in Loper Bright ended Chevron deference, meaning courts will more often independently review agency statutory interpretations — a factor likely to shape how far any new rule can go.

The regulatory roadmap: who should prepare now

The agenda creates a multi‑stage timeline. Stakeholders should use a staged approach keyed to expected dates and identified policy issues.

1) From now through December 2025 — Build the compliance file

Prepare documentation and processes now to reduce risk if the proposed rule tightens standards.

• Document wages and roles
  • Employers must pay the higher of the actual or prevailing wage to comparable U.S. professionals.
  • Compile pay policies, job descriptions, and comparison data showing compliance.
  • Budget for government fees that often exceed $6,000.
• Confirm specialty‑occupation logic
  • Expect focus on whether degree fields are “directly related.”
  • The Biden administration clarified “directly related” as a “logical connection” between degree (or equivalent) and duties. Maintain evidence supporting that link.
• Review third‑party placement structures
  • Identify roles working at customer locations, governing contracts, and who controls the work.
  • Build a paper trail showing supervision, deliverables, and reporting lines.
• Cap and cap‑exempt planning
  • Universities, nonprofit research institutions, and partners should inventory roles that rely on cap‑exempt status.
  • Students on cap‑gap extensions should map program end dates to work authorization timing for contingency planning.

2) When the proposed rule publishes (target: December 2025) — Evaluate and adjust

• Read the proposal end‑to‑end
  • Focus on definitions, oversight mechanisms for third‑party worksites, cap‑exempt changes, effective dates, and transitional policies.
• Identify roles at risk
  • Flag broad or interdisciplinary positions that may be vulnerable if “directly related” is read narrowly.
  • Prepare job‑duty matrices linking coursework or equivalent experience to required tasks.
• Plan for vendor‑client work
  • If limits on customer‑site approvals reappear, prepare alternatives (stronger supervision docs, project structures keeping control with the petitioning employer).

3) After publication — Practical next steps for stakeholders

• Employers
  • Set a compliance calendar with milestones and internal review gates.
  • Communicate oversight expectations to managers who assign H‑1B work at customer sites.
• H‑1B candidates and employees
  • Collect transcripts, syllabi, and employment letters that show a logical connection between education and duties.
  • Keep updated job descriptions and performance plans.
• Universities and students
  • Track cap‑gap references in the proposal and be ready to advise graduating students promptly.

For official program background, see the USCIS H‑1B program overview. According to analysis by VisaVerge.com, employers will closely watch DHS timing and plan hiring around those dates.

Specialty‑occupation standards: showing the “directly related” link

The Biden administration’s final H‑1B rule clarified wording that appeared in the Trump administration’s October 2020 rule. The earlier phrase, “directly related specific specialty,” risked narrowing what qualifies as a specialty occupation. After industry feedback, the final rule retained “directly related” but defined it as a “logical connection” between degree (or equivalent) and position duties. It also affirmed that multiple degree fields may qualify.

What to do now:

• Map duties to degree
  • Create a clear, written link between core tasks and knowledge gained in the degree field(s).
• Cover interdisciplinary roles
  • If multiple degree fields can fill a role, list each field and explain how it relates to distinct job components.
• Prepare for adjudication consistency
  • Organize evidence so reviewers can quickly see the link: job duties, course lists, project descriptions, and work product samples.

Note: The Trump administration could seek to restrict this language again. But post‑Chevron, courts will scrutinize agency interpretations more closely, which may limit how far new definitions can depart from statutory text.

Third‑party placements: oversight, past limits, and planning

Oversight of H‑1B workers at customer locations is likely to be central to the proposed rule.

Historical context:

• In 2018, the “Contracts and Itineraries” memo and subsequent actions made customer‑site placements more difficult—sometimes limiting approvals to very short periods.
• The October 2020 rule would have capped customer‑site approvals at one year.
• January 2021 unpublished rules and DOL memos suggested customers could be treated as employers of record, a radical shift that drew legal pushback.

Why that matters: If a future rule again blurs the employer‑employee relationship, it could force customers into immigration obligations most will not accept, disrupting service contracts.

Preparation steps if your model includes customer sites:

• Contract clarity
  • Ensure agreements clearly establish the petitioning employer’s right to control the work—supervision, evaluation, and assignment.
• Supervision evidence
  • Collect artifacts demonstrating day‑to‑day oversight: reporting structures, performance reviews, tooling access, and deliverable approvals.
• Project documentation
  • Keep statements of work and change orders tying specialized duties to the employee’s education and experience.

Industry impact:

• IT services contracts can be enormous and support skills U.S. companies don’t always maintain in‑house (AI deployments, cross‑platform support, pharmaceutical digital solutions).
• Research by Giovanni Peri, Kevin Shih, and Chad Sparber attributes roughly 30% to 50% of U.S. aggregate productivity growth (1990–2010) to foreign STEM workers and finds a one‑percentage‑point increase in their citywide share raised native college‑educated wage growth by about 7–8 percentage points.

Cap exemptions, cap‑gap, and what schools/nonprofits should track

DHS explicitly mentions revising cap‑exemption eligibility. Previously, employers and university groups supported provisions that:

• Allow more organizations to qualify as cap‑exempt nonprofit research institutions.
• Extend cap‑gap protections so international students can maintain status and work authorization.

If the new rule revisits these areas, affected groups should prepare impact analyses.

Action items:

• Universities and affiliated nonprofits
  • Map positions that rely on cap‑exempt status and document how they meet current research/nonprofit criteria.
• F‑1 students and employers
  • Model scenarios where cap‑gap protections remain, narrow, or change. Build onboarding contingencies for project timelines.

Wages, fees, and integrity enforcement: compliance in practice

Under current law:

• Employers must pay the higher of the actual or prevailing wage to comparable U.S. professionals.
• Government fees for H‑1B petitions often exceed $6,000.

DHS emphasizes protecting wages and adding scrutiny for employers who violated program requirements.

Practical steps:

• Wage files
  • Keep pay scales, wage surveys, and internal equity analyses accessible.
  • Document promotions and raises aligned with market pay.
• Audit readiness
  • Maintain a central compliance file per H‑1B role: job description, org chart, proof of work location(s), and wage evidence.
• Corrective action logs
  • If past compliance issues exist, document remediation steps and timelines to show good‑faith correction.

Legal context: APA and the end of Chevron deference

• The October 8, 2020 H‑1B rule was blocked for violating the Administrative Procedure Act.
• The Supreme Court’s June 2024 ruling in Loper Bright overruled Chevron deference.

Quote from the ruling summary:

“The Administrative Procedure Act requires courts to exercise their independent judgment in deciding whether an agency has acted within its statutory authority, and courts may not defer to an agency interpretation of the law simply because a statute is ambiguous; Chevron is overruled.”

Implications:

• Agencies face stricter judicial review when interpreting statutes.
• This may limit attempts to expand definitions of “specialty occupation,” employer‑employee relationships, or cap exemptions beyond congressional text.
• Expect any final rule to be litigated and timelines to shift if litigation occurs.

Parallel rule on employment‑based green cards (possible Jan 2026)

DHS plans a separate rule with a potential publication date of January 2026 to update standards governing extraordinary ability and outstanding professors and researchers, and to clarify evidentiary requirements for EB‑1, national interest waivers (NIW), and physicians of renown.

Trends and potential impacts:

• O‑1A filings rose from 7,710 (FY 2021) to 10,010 (FY 2023), with approval rates >90%.
• NIW requests rose 51% from FY 2021 to FY 2022 and 81% from FY 2022 to FY 2023, though approval rates fell.
• DHS could raise the bar for EB‑1 extraordinary ability (e.g., requiring more than “3 of 10” criteria), forcing applicants to supply stronger evidence portfolios.

Research note:

• Exequiel Hernandez, Britta Glennon, and Jens Friedmann find that stricter limits on hiring foreign talent often push firms toward acquisitions — an expensive response that suggests lost talent is not easily replaced by domestic hiring.

Demand, supply, and practical planning implications

Demand remains intense:

• In FY 2025, DHS recorded 442,000 unique beneficiaries in the H‑1B registration process.
• Even if major IT providers had no approvals, the 85,000 annual limit would still leave over 300,000 qualified beneficiaries unselected.

What to expect and how to respond:

• Expect closer review of specialty occupation qualifications and degree‑duty alignment.
  • Respond: tighten job definitions and degree‑duty mapping.
• Expect more oversight at customer locations.
  • Respond: reinforce employer control and document supervision.
• Expect attention to wage protections and past compliance issues.
  • Respond: prepare robust wage files and remediation records.
• Expect possible changes to cap‑exempt eligibility and cap‑gap timing.
  • Respond: model impacts for students, universities, nonprofits, and partner employers.

The Biden administration’s final H‑1B rule had softened some earlier restrictions (for example, dropping a rigid “itinerary requirement” for multi‑site work). The upcoming DHS rule could revisit such areas, but post‑Chevron judicial scrutiny will likely keep final regulations closer to statutory language.

Key preparatory checklist

• Assemble wage documentation and prevailing wage analyses.
• Clarify job‑to‑degree connections with mapped evidence (transcripts, syllabi, project descriptions).
• Map vendor‑client oversight and ensure contracts demonstrate petitioning employer control.
• For universities and nonprofits: inventory cap‑exempt roles and prepare cap‑gap contingencies.
• Maintain central compliance files and corrective‑action logs for audit readiness.
• Monitor the DHS regulatory agenda (H‑1B rule target: December 2025; employment‑based green card rule target: January 2026) and be ready to review proposals promptly.

Important takeaway: Preparing now—by documenting wages, clarifying degree‑duty connections, and mapping vendor‑client oversight—will reduce surprises and help employers, workers, and universities adapt as DHS moves toward proposed publication.

For program background, see the USCIS H‑1B program overview.