H-1B Modernization Rule
Key Changes for Founders

What Changed with the H-1B Modernization Rule?

A new H-1B rule took effect on January 17, 2025, containing several provisions that should be useful for startups and founders. While some of these provisions are new, many are merely codifying—and in some cases, clarifying—already existing policies, thus making them harder to rescind.

Expanded Cap Exemptions

The new rule broadens the scope of cap-exempt H-1B employment in ways that have the potential to support entrepreneurship and technological innovation.

A More Flexible Definition of "Specialty Occupation"

Under the new rule, a position may qualify as a specialty occupation even if it allows for a range of qualifying degree fields, as long as each field has a logical connection to the job duties. USCIS believes this change will allow the H-1B program to better adapt to new and emerging technologies, education, and research fields.

Extended Cap-Gap Protections for International Students

For F-1 students with a pending, timely filed cap-subject H-1B petition, the validity period of their F-1 status and any OPT work authorization will be automatically extended until April 1 of the relevant fiscal year while their H-1B petition is pending. This expansion will help employers attract and retain global talent and avoid disruptions and uncertainty.

Clarified and Codified H-1B Eligibility for Business Owners

The new H-1B rule clarifies that a beneficiary who has a controlling interest in a petitioning entity—either by owning more than 50% of the petitioner or by having majority voting rights—may be eligible for H-1B status, albeit with certain added conditions.

Shorter Validity Periods

For beneficiary-owners, the initial validity period is limited compared to standard H-1B petitions. Petitioners should plan accordingly when mapping out their immigration timeline.

Job Duty Requirements

The beneficiary must perform specialty occupation duties a "majority of the time." Apart from some incidental duties, non-specialty occupation duties must be directly related to owning and directing a business. Petitioners should expect USCIS to scrutinize each described job duty as well as the expected—or actual, in the case of extensions—time spent on each job duty.

Examples of permissible non-specialty occupation duties that are directly related to owning and directing a business include:

• Signing leases
• Finding investors
• Negotiating contracts
• Developing a business plan
• Engaging with potential suppliers and other stakeholders
• Talent acquisition

Sole Owners

While the new rule does not allow for "self-sponsorship," a beneficiary who is the sole owner of a business may still file an H-1B petition as a United States employer under certain conditions.

Concurrent H-1B Employment

Beneficiary-owners may seek concurrent H-1B employment in multiple qualifying specialty occupation roles, as long as they adhere to the "majority of the time" condition when working for their own business.

Additional Changes Founders Should Know

New Mandatory Form I-129

A new, revised edition of Form I-129, Petition for a Nonimmigrant Worker, became mandatory starting January 17, 2025. There is no grace period for previous form versions—petitioners must use the updated form immediately.

Deference to Prior Approvals

USCIS codified its on-and-off policy of deference to prior approvals where the same parties and the same underlying facts are involved. This will apply to all nonimmigrant categories using Form I-129 (e.g., H, O, L, TN, etc.) and include requests for extensions of stay, change of status, amendments, and consular processing.

Itinerary Requirement Eliminated

Petitioners no longer have to provide itineraries for H petitions, reducing the documentation burden for employers.

Bona Fide Job Offer & Remote Work

Bona fide specialty occupation positions must be available for the beneficiary as of the requested start date. Importantly, a bona fide job offer may include telework, remote work, or other off-site work within the United States, as well as more flexible work schedules.

Evidence Requests & Site Visits

The rule codifies the government's authority to request contracts, work orders, client letters, or similar evidence to determine if the position is bona fide. Trade secrets contained in such materials may be redacted or sanitized.

Site visits may be performed at the petitioner's headquarters, satellite locations, or the locations where the beneficiary works or will work, including the beneficiary's home or third-party worksites. A refusal to cooperate with a site visit may result in a denial or revocation of the petition.