Summary

• Senators Chuck Grassley (R-IA) and Dick Durbin (D-IL) reintroduced bipartisan legislation to overhaul the H-1B and L-1 visa programs, targeting fraud, outsourcing, and wage suppression.
• Key proposed reforms include new wage and recruitment requirements, searchable job postings, prioritization for higher-education and STEM visa applicants, and tougher enforcement of employer compliance.
• The bill places limits on employers; for example, preventing organizations from having more than 50% of their workforce on H-1B or L-1 status, and restricting third-party placement without a waiver.
• The legislation comes amid increased scrutiny of major tech firms and in the wake of the administration’s recent $100,000 new H-1B fee and proposed wage-based lottery reforms.

 

The H-1B and L-1 Visa Reform Act of 2025, introduced by Senators Grassley and Durbin, represents a significant effort to reform two of the most widely used employment-based visa programs in the United States. The legislation aims to close perceived loopholes, strengthen wage and recruitment standards, enhance transparency in the hiring of foreign workers, and impose stricter oversight of employers that rely heavily on H-1B and L-1 nonimmigrants.

 

Several recent policy moves have heightened the urgency of visa reform, including a $100,000 fee for new H-1B petitions, a proposed wage-based lottery for H-1B allocation, and increased enforcement initiatives targeting program misuse. The Grassley-Durbin bill is designed to work alongside these changes.

 

H-1B Proposals:

Stricter H-1B Degree Rules

• Requires a U.S. bachelor’s or equivalent foreign degree directly related to the job.
• Experience alone or incomplete degree programs no longer qualify.
• Codifies and potentially tightens existing regulations.

Three-Year Initial Stay

• H-1B validity capped at 3 years; an extra 3 years allowed with approved I-140.
• Preserves current AC21 provisions for extensions beyond 6 years if green card process is underway.

New H-1B Allocation System

• 65,000 annual visas prioritized by education and wage level.
• Top priority: U.S. STEM master’s/Ph.D. holders and Level 4 wage earners.
• Maintains separate 20,000 cap for U.S. advanced-degree holders.
• Employers with strong compliance histories gain priority consideration.

Higher Wage Standards

• Employers must pay the highest of: local prevailing wage, median wage for the role, or Level 2 OEWS wage.
• LCAs must explain wage determination methodology.

Recruitment & Non-Displacement Requirements

• All employers must recruit U.S. workers and post jobs on a DOL site for 30 days.
• Cannot replace U.S. workers within 180 days before or after hiring an H-1B.
• Extends obligations previously limited to H-1B-dependent employers.

Limits on Outsourcing & Third-Party Placement

• H-1B placements with other employers require a DOL waiver.
• Waiver only granted if no U.S. worker is displaced and no “labor-for-hire” arrangement exists.

Cap on H-1B/L-1 Workforce Share

• Employers with 50+ U.S. workers may not have more than 50% on H-1B or L-1 status.

Enhanced DOL Oversight

• LCAs reviewed for fraud indicators, not just completeness.
• Review period extended to 14 days (previously 7), slowing redeployments.
• New processing fee funds enforcement and investigations.

 

L-1 Proposals:

New L-1 Wage Requirements

• Employers must pay L-1 workers (employed over one year) the highest of the local prevailing wage, the median local wage for the occupation, or the OEWS Level 2 median wage.
• Must also ensure L-1 employment does not negatively affect the working conditions of U.S. workers.
• This introduces wage standards where none currently exist.

Stricter L-1B “Specialized Knowledge” Standard

• Redefines eligibility to include only those with proprietary, non-market-available knowledge that is clearly different from peers.
• Patents or copyrights alone do not qualify unless the worker is a key individual essential to the role.
• Internal company procedures count only if they are complex, unique, and protected from disclosure.

Non-Displacement Rule for All L-1 Employers

• Prohibits replacing or displacing U.S. workers within 180 days before or after employing an L-1 worker.

Restrictions on Third-Party Placement

• L-1 placements at other companies require a DOL waiver.
• Waiver only granted if the secondary employer: (1) does not displace or plan to replace U.S. workers, (2) does not control or supervise the L-1, and (3) is not engaging in “labor-for-hire.”
• DOL must decide waiver requests within 7 days.

Expanded Blanket L Program

• Allows employers with approved blanket L petitions to receive expedited USCIS processing for individual L-1 filings (details unclear).

Formalized “New Office” L-1 Requirements

• Codifies current USCIS standards and adds new obligations.
• Requires a detailed business plan, proof of physical office space, and financial ability to begin operations.
• Initial validity limited to 12 months; extensions allowed only if the new office follows the business plan and operates continuously, with rare exceptions granted by DHS.

Bipartisan Support and Legislative Timing

With original cosponsors from both parties—including Senators Tuberville (R-AL), Blumenthal (D-CT), and Sanders (I-VT)—the bill has bipartisan backing and reflects a rare convergence of concerns about high-skilled visa programs. The legislation was introduced September 29, 2025, and is under consideration in the Senate Judiciary Committee.

 

The H-1B and L-1 Visa Reform Act of 2025, championed by Senators Grassley and Durbin, marks a major push to recalibrate two influential employment-based visa programs. With its strongest set of employer obligations, wage conditions, transparency mandates, and enforcement mechanisms in years, the legislation seeks to realign the H-1B and L-1 systems with their original intent of supplementing—not supplanting—the American workforce. While the changes may increase burdens on employers and alter the strategic calculus of foreign-talent recruitment, they also reflect growing congressional consensus around reform. As the bill proceeds through Congress, employers, visa holders and policy watchers should prepare for a significantly different regulatory landscape in the high-skilled immigration arena.

 

Source:

https://www.judiciary.senate.gov/press/rep/releases/grassley-durbin-propose-bipartisan-h-1b-and-l-1-visa-reforms-to-protect-american-workers-and-stop-outsourcing-jobs