New US H-1B visa rules: What students and IT professionals can expect

With less than a month to go for Donald Trump — with his oft-stated anti-immigrants stance — to take over as President of the US, the American Department of Homeland Security (DHS) recently revised the H-1B visa programme.

For Indian IT firms with American clients, and students seeking education in the US, the new rules present both opportunities and challenges.

The updates offer employers in the US greater flexibility and promise more straightforward transitions from student to work visas. However, they also come with increased compliance requirements and potential company obstacles.

Transition from F1 to H-1B

The reforms are designed to address the persistent obstacles in the visa process, mainly focusing on F-1 student visa holders.

The new regulations offer a safety net to these foreign students who frequently experience uncertainty as their Optional Practical Training (OPT) expires before the approval of H-1B petitions. By extending the "cap-gap" period to April 1, when H-1B petitions become available, students can continue to work uninterrupted.

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“We are supportive of foreign nationals transitioning from a student visa to an H-1B wherein they will be able to extend their postgraduation work permit to a year after they’ve filed their H-1B petition to prevent gaps in employment,” said Shivendra Singh, Vice President - Global Trade Development, at India’s apex technology body Nasscom.

Increased flexibility

In addition, the reforms broaden the definition of specialty occupations, providing employers and applicants with increased flexibility. Roles that previously necessitated specific academic qualifications are now eligible for candidates with degrees in related disciplines, too.

For instance, a data analyst may now qualify with a degree in data science or a related field, a modification that is intended to align with the evolving requirements of contemporary industries.

“This will lend greater flexibility to job seekers in STEM, artificial intelligence and other emerging fields. This change is expected to benefit job seekers and companies struggling to fill niche roles in a competitive market,” Poorvi Chothani, the proprietor and managing partner of LawQuest, an immigration law firm based in Florida, was quoted as saying in a media report.

Self-petitioning for entrepreneurs

Indian IT companies, which significantly depend on the H-1B programme to cater to US client requirements, are poised to gain some advantages.

The transition of F-1 students to H-1B status is flexible, ensuring a consistent supply of skilled talent from US universities, while the streamlined renewal processes for H-1B holders promise fewer delays.

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Furthermore, H-1B beneficiaries with controlling interests in petitioning companies are now permitted to self-petition, which presents an opportunity for Indian entrepreneurs to establish businesses in the US.

Stringent scrutiny

Nevertheless, the advantages are accompanied by heightened intricacies.

Mandatory site visits to confirm the physical presence of H-1B workers at job locations are among the more stringent compliance requirements that DHS has implemented.

Consulting firms that employ H-1B employees at third-party client sites are subjected to even more stringent scrutiny. The eligibility of an H-1B position must now be in accordance with the job requirements of the client rather than those of the consulting firm.

"This approach introduces more documentation, adds complexity and reduces flexibility in hiring professionals with diverse skill sets, which is crucial for consulting firms," Shivendra Singh stated. He said these modifications could potentially lead to more Requests for Evidence (RFEs), which could impede the consulting firms' process.

The reforms are also intended to address the exploitation of the H-1B system. The objective of improved oversight is to prioritise genuine candidates and eliminate spurious applications.

Huge numbers

The demand for H-1B visas remains high despite the obstacles. Indian nationals continued to dominate the programme in 2024, accounting for 72.3 per cent of the 386,000 visas issued in 2023, as the USCIS received nearly 480,000 registrations.

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In the past five years, Indian nationals have been granted between 67 and 72 per cent of all H-1B visas, according to External Affairs Minister S Jaishankar.

It is estimated that approximately 600,000-700,000 Indian nationals may have benefited from the H-1B programme over the past five years, taking into account both initial and continuous employment petitions.

Reducing H-1B visa dependence

Nevertheless, Indian IT companies such as TCS, Wipro and Infosys have reduced their utilisation of H-1B visas by 56 per cent over the past eight years as they expand their recruitment strategies. Simultaneously, the utilisation of H-1B workers has been elevated by 189 per cent by US technology giants such as Microsoft, Google and Amazon.

The updated H-1B programme is seen to present a combination of responsibility and potential. It facilitates international students' transition from academia to industry, ensuring job security and career advancement.

It provides Indian IT firms with the opportunity to access specialised talent while also adjusting to more stringent oversight.