New H-1B Reform Rule Effective January 17, 2025: What It Means for CPT Students in the 2025 Lottery

The U.S. Department of Homeland Security published the final rule of the H1B reform on December 17, 2024, stating that it will take effect on January 17, 2025. This means that candidates in next year's H1B lottery round will be directly affected by the final rule.

This plan, commonly referred to as the H1B reform, is officially titled 'Modernizing H-1B Requirements, Providing Flexibility in the F-1 Program, and Improving Other Nonimmigrant Worker-Related Programs.' It actually originated from the Biden administration and was first proposed in October 2023, but due to a lengthy comment period and repeated revisions, the final plan was never finalized. At the end of 2023, to quickly advance the entire project, supporters separated out the core reform—'one person, one lottery'—for public comment and early approval, catching the 2024 H1B season. The rest has been left until now.

With the Biden administration about to leave the White House and both chambers of Congress falling into Republican hands, the project initiated under Democratic leadership has entered its final countdown: either pass quickly or risk being shelved. Due to the change of administration and the long delay, and hoping the reform can catch the 2025 H1B lottery, DHS ultimately decided to publish the final rule in this holiday-packed December.

These rules are well-intentioned, aiming to simplify processes, give U.S. employers more flexibility, and strengthen the integrity of the H1B employment-based immigration program as a whole. However, some provisions may not be most favorable to F1 international students. The full document published on December 17 is over 460 pages long; those interested can view the original text here. If you can't get through it, let us walk you through the key points:

???? Extended Cap-Gap

The biggest beneficiaries of this new rule ???? are F1 students currently on OPT. Because under the new rule, the Cap-Gap deadline will be extended from October 1 of the current year to April 1 of the following year. F1 students awaiting H-1B adjudication will no longer face interruptions in legal status or work authorization.

???? Redefinition of 'specialty occupation'

This has always been the most controversial point in the H1B program. In our July blog this year, we mentioned that the two conditions—that the candidate must hold a degree in a specific specialty and that the H1B applicant's "specialty and job duties" must be highly matched—are actually very unrealistic. Even for native-born Americans, it is difficult to ensure that what you study is exactly what you will do for work. A 2021 survey showed that among all so-called CS practitioners, 51% of U.S.-citizen CS employees did not graduate directly from that major, and 18% of H1B and other work visa holders also did not graduate from that major.

It sounds like common sense that what you study doesn't necessarily determine what you do for the rest of your life, but the new H1B rule does not accept this. The document notes that industry insiders not only oppose this definition but also demand that the requirement to match specialty with job position be eliminated outright, in order to increase the probability of the U.S. recruiting tech talent and highly skilled talent.

However, these suggestions were all rejected. In this finalized version of the H1B reform, the definition of 'specialty occupation' has been further tightened.

What does this mean for international students❓

• This means that degrees in general fields, such as humanities, liberal arts, or similar non-specialized programs, may not meet the new 'specialty occupation' standard. Many liberal arts graduates who currently hold H1B have already secured status, but if they want to change jobs, their H1B transfer will be re-examined, and they may very likely receive an RFE for failing to meet the new 'specialty occupation' definition, or lose H1B eligibility. This directly reduces job mobility for H1B holders, making job-hopping more nerve-wracking.

• If you are still studying, or have multiple degrees, it's best to use a STEM degree to apply for H1B. The new rule particularly emphasizes increasing acceptance of non-traditional but 'specialized' disciplines such as AI. Overall, the U.S. only wants people it lacks, and doesn't care much about how outstanding you are per se. To put it simply and exaggeratedly, Harvard's Liberal Arts loses to West Cliff's CS.

???? Strengthening H1B program integrity

Sounds vague, but it's actually meant to control staffing companies like ICC and CCC. The document mainly emphasizes the following points:

• Site inspections: U.S. Citizenship and Immigration Services (USCIS) has formally granted itself the authority to conduct site inspections to verify whether employers meet requirements. Noncompliance may lead to denial or revocation of applications.

• Beneficiary-owners: H-1B beneficiaries who hold controlling ownership in the petitioning company can now apply, but their initial petition will be limited to a validity period of 18 months.

• Legal existence: Employers must prove they have a real and valid position in the U.S. and a legal presence.

Who are the new rules for❓

The newly added site inspection provisions are intended to combat H1B fraud and target "shell companies." So-called "shell companies" refer to companies that exist solely to file H-1B petitions; they have no real positions or actual operations and will find it hard to escape USCIS's unannounced on-site inspections.

In addition, the rule directly targets ICCs and can largely prevent certain unscrupulous staffing companies. In past years, to game the system and increase the selection rate of employees they hold, these companies often filed H-1B petitions for candidates under Scenario A, but after the candidate obtained H1B, they actually performed Type B work at a third party. Simply put, this constitutes "resume fraud" and is very unfair to those who honestly fill out applications based on their true situation. After the new rule takes effect, such behavior will typically result in wage violations or failure to meet Labor Condition Application (LCA) requirements.

For the vast majority of Chinese international students, this is good news, as it无形中 removes a group of Indian competitors. But at the same time, everyone should be extra vigilant and carefully vet employers before joining; don't assume background checks are only something employers do to you. If the employer is unreliable, your path to staying in the U.S. may be cut off—what a shame.

Additionally, this reform also affects entrepreneurs. Many students have asked before whether they can start their own company and get H1B? Before today, we could only say the rules didn't say it was prohibited. But this new rule explicitly states that it is allowed!

However, as the lottery petitioner, you cannot own more than 50% of the equity. At the same time, if you can meet other requirements such as "specialty occupation," you can file for yourself. To prevent fraud, in this situation, your initial H-1B petition and first H-1B extension can only be granted for a maximum validity period of 18 months, after which it will be reviewed again; if approved, you can receive an H-1B extension of up to 3 years at a time.

???? Expanding the scope of cap-exempt H-1B

The definitions of "nonprofit research organization," "governmental research organization," and key terms have been revised, expanding the scope of cap-exempt H-1B. The document states that if "research" is a "fundamental activity" of a nonprofit or nongovernmental organization, these institutions can now also qualify for an exemption from the H-1B cap. Previously, "research" had to be the "primary mission" of these institutions.

Previously, people looked down on cap-exempt H1B partly because these jobs usually pay lower salaries, and partly because they are actually not easy to find. It's not hard to intern at many NGOs and NPOs, but when you ask for H1B, you find they don't qualify to sponsor you for cap-exempt H1B. But now it's different: with this reform, a large number of NGOs and NPOs will be able to offer international employees cap-exempt H1B that is not subject to the quota or application time restrictions.

If you're interested in cap-exempt H1B, check out our article: A Comprehensive Review of Jobs That Don't Require H1B Lottery!

???? Continued implementation of 'one person, one lottery'

No need to explain this; it was implemented once last year and will continue this year. But frankly, because the number of lottery participants increases year by year, with one registration per person, past data shows it has not significantly increased the selection rate. Everyone should still plan ahead for a backup plan if not selected.

What does this mean for students currently using Day 1 CPT?

• This year's selection rate will rise. You may see the light soon. Last year's 'one person, one lottery' slightly alleviated H1B abuse. This year's 'strengthening H1B program integrity' provisions will effectively address companies and individuals abusing the H1B system, potentially further helping legitimate lottery participants improve their chances.

• In addition, if you are using Day 1 CPT and haven't found a suitable employer yet, you can legally and reasonably consider starting a company with friends to file H1B for yourself. If you start a company, as long as you are not the sole owner and there are other shareholders, they can sign a CPT Agreement for you, and the school will accept it. Although the redefinition of 'specialty occupation' makes overly 'general' majors like MBA seem increasingly distant from H1B, if you study Entrepreneurship, DBA, etc., and then start your own business, your major and position perfectly match. Of course, before executing, still consult an immigration lawyer and professional accountant carefully!

• If you are in an MBA or DBA Day 1 CPT program, don't worry too much: if this is your second master's and you have another master's degree, then studying an MBA does not affect your H1B lottery and application at all. If your first master's is an MBA from a non-profit school, you can choose to use the first master's for the lottery and use your bachelor's degree in a non-management field for H1B filing. Of course, this requires ensuring that your bachelor's degree is related to the job position used for H1B application. Additionally, this approach will increase the chance of receiving an RFE. But based on past data, the probability of successfully passing an RFE is far higher than the probability of being selected for H1B with a bachelor's degree, so it's still worth trying. Of course, consult professionals before attempting, especially the lawyer arranged by your employer. If your bachelor's is not from the U.S. and your first master's in the U.S. is an MBA, then the MBA最好有和目前工作所对应的concentration，这样即便被RFE，也仍旧有argue的余地。

Finally, at the end of 2024, ㊗️ everyone gets H1B in 2025. Also, a small preview: in 2025, Wildfire will continue to organize the "Yonghe Temple Blessing Event" for everyone. We've recently received inquiries from students; don't be anxious, we are preparing. Follow our official website blog or WeChat public account to become among the first H1B lottery participants to send wishes back to Beijing~

Disclaimer: The above content is for reference and sharing only and does not constitute legal advice. If you have questions, please consult a professional lawyer based on your own situation.