Trump Administration Efforts to Eliminate Cartels Pose Heightened Risk for Financial Institutions
As discussed in Bracewell’s February 11 and February 26 updates, the executive branch is prioritizing the “total elimination” of cartels and transnational criminal organizations, both through edicts from the Oval Office and through agency initiatives. Each action is significant on its own, but taken together, this concerted effort increases the potential criminal and civil liability of any company — but particularly financial institutions — that conducts business in Mexico and certain parts of Central and South America. Below we break down three significant pieces of this effort and provide guidance on how companies should navigate this new risk landscape.
Designation of Cartels as FTOs and SGDTs Expands Scope of Criminal and Civil Liability
Pursuant to Executive Order 14157, the US State Department designated eight international cartels and transnational organizations[1] as Foreign Terrorist Organizations (FTOs) and Specially Designated Global Terrorists (SGDTs). The list includes six Mexican cartels, TdA (a cartel active in parts South America) and MS-13 (a cartel active in parts of Central America). These new designations increase the risk of criminal and civil liability for both US and foreign companies that may interact with these cartels knowingly or unknowingly, directly, through third-party vendors, or when paying certain “fees” and to conduct business in areas controlled by the cartels.
Criminal Liability. Providing any of the cartels now designated as FTOs with money, financial services, lodging, personnel or transportation may constitute the criminal offense of providing “material support” to a terrorist organization in violation of 18 U.S.C. § 2339B. Because the reach of 18 U.S.C. § 2339B is not confined to US entities or activities on US soil, these charges have been brought against foreign companies for transactions in foreign countries, including against Lafarge, a French building materials manufacturer for sharing revenue with FTOs (ISIS and ANF) in Syria, and Chiquita Banana for making payments to an FTO (the AUC) in Colombia. By increasing the number of FTOs, the new designations increase the risk of similar prosecutions directed at any company providing material support to these newly designated FTOs operating in Mexico and in parts of Central and South America. While some of these entities may previously have been subject to US sanctions, criminal liability creates an even greater threat.
Civil Liability. The Anti-Terrorism Act, 18 U.S.C. § 2333, allows US nationals injured by an act of terrorism to bring claims against companies that engage in or aid and abet an act of international terrorism by providing material support or knowingly providing substantial assistance to the FTO who perpetrated, planned or authorized the attack. The potential liability is considerable, because the statute allows the victims to “recover threefold the damages he or she sustains and the cost of the suit, including attorney’s fees.” In Linde v. Arab Bank, PLC,[2] for example, a jury found Arab Bank Plc liable for knowingly supporting militant attacks in Israel linked to Hamas — an FTO — based on the bank’s providing financial services to charities that plaintiffs allege were agents of Hamas set up to solicit and launder money to support the FTO’s operations. Before the verdict was overturned on appeal, the bank was facing at least $100 million in damages. Ultimately, Arab Bank Plc reached a settlement with the plaintiffs for an undisclosed amount.
Justice Department Expedites Cartel-Related Prosecutions
Historically, certain types of prosecutions required approvals by various stakeholders within the Department of Justice. To facilitate the “aggressive prosecution” of cartels and transnational criminal organizations (TCOs), Attorney General Pam Bondi has suspended certain approval requirements, to which she referred as “bureaucratic impediments,” that might slow down or impede prosecutors from bringing charges against cartels, TCOs or their affiliates for some terrorism charges,[3] violations of the International Emergency Economic Powers Act (IEEPA), racketeering, violations of the Foreign Corrupt Practices Act and money laundering and asset forfeiture. See Bondi Memorandum regarding Total Elimination of Cartels and Transnational Criminal Organizations (Bondi Memo).
Before this suspension, a prosecutor would need approval from either the Criminal Division or the National Security Division (NSD) before issuing warrants and filing the charges listed above. Now, prosecutors are able to proceed more easily, without the same level of oversight. The Bondi Memo does, however, encourage consultation with the NSD and requires that prosecutors provide 24 hours’ advance notice of the intention to seek charges or apply for warrants. Nevertheless, the requirement to provide NSD with 24 hours’ notice, as compared to the requirement to meet NSD’s approval requirements, will allow for more charges to be brought more quickly.[4]
In addition to increasing the number of charges brought against cartels and their members directly, these changes will likely lead to an increase in the number of charges brought against companies for various crimes, including providing “material support” to a terrorist organization in violation 18 U.S.C. § 2339B, as described above; facilitating payments related to the human smuggling or illegal drugs, which has been declared a national emergency under IEEPA; and laundering money used for activities of the cartels.
Financial institutions are particularly at risk of tripping these wires. Banks that may provide financial services, or money transfer businesses (MTBs) that facilitate payments to cartels, for example, could be the subject of the criminal prosecutions described above. Given that cartels are woven into the fabric of many industries in Mexico, Central and South America, banks may be providing these services unwittingly. To address this threat, banks must reevaluate their Customer Due Diligence and KYC policies and reassess their current customers.
OFAC Highlights Risk for Financial Institutions Related to Cartel Designations
Reinforcing the increased risk of liability to financial institutions described above, the Office of Foreign Asset Control (OFAC) issued an alert on March 18, 2025 (OFAC Alert), warning of exposure to sanctions and civil or criminal penalties, especially for providing material support to foreign terrorist organizations in violation of 18 U.S.C. 2339B. The OFAC Alert is specifically directed at US and foreign financial institutions, noting that “foreign financial institutions that knowingly facilitate a significant transaction or provide significant financial services for any of the designated organizations could be subject to US correspondent or payable-through account sanctions.” This could suggest that the administration is not only aware that its new approach may ensnare financial institutions, but that doing so is one of its aims, likely calculating that such a focus will decrease cartel access to finances.
There is a precedent for such prosecutions of financial institutions for failing to maintain effective anti-money laundering programs and to conduct appropriate due diligence to avoid transacting with customers located in countries subject to sanctions enforced by OFAC. These prosecutions can result in fines and penalties greater than $1 billion. Now, the OFAC Alert serves as a warning that financial institutions may be prosecuted if they provide financial services to any of the cartels now designated as FTOs.
[1] The first round of designations include: Tren de Aragua (TdA); La Mara Salvatrucha (MS-13); Cártel de Sinaloa; Cártel de Jalisco Nueva Generación (CJNG); Cártel del Noreste (CDN); La Nueva Familia Michoacana (LNFM); Cártel del Golfo (CDG); and Cártel Unidos (CU).
[2] Case No. 04-cv-2799 in the United States District Court for the Eastern District of New York.
[3] The terrorism charges for which NSD approval has been suspended include: 18 U.S.C. §§ 2332a, 2332b, 2339, 2339A, 2339B, 2339C, 2339D, 21 U.S.C. § 960A, and 50 U.S.C. § 1705. This policy does not exempt from NSD’s approval and concurrence requirements cases involving 18 U.S.C. §§ 175, 175b, 219, 793, 794, 831, 951, and 1030(a)(l).
[4] Although it is not entirely clear in the Bondi Memo, these changes appear to apply only to “investigations targeting members or associates of cartels or TCOs.” The suspension of approval requirements could be interpreted, or may be amended, to include all charges under the enumerated statutes.
Immigration Enforcement and Healthcare Facilities: Key Considerations for Providers
Recent changes in federal immigration enforcement practices have prompted renewed attention to how healthcare providers manage requests from law enforcement agencies. While federal policy continues to recognize healthcare facilities as sensitive environments, there has been increased interest in enforcement activity in or around such locations. Healthcare organizations should consider taking this opportunity to review internal protocols and confirm they are prepared to respond in a manner that is consistent with applicable federal and state law.
This post outlines key considerations related to patient privacy, facility access, and provider obligations when immigration enforcement activity intersects with clinical operations.
Patient Privacy and Requests for Information
Healthcare providers remain subject to the requirements of the Health Insurance Portability and Accountability Act (HIPAA), which generally prohibits the disclosure of protected health information (PHI) without patient authorization, except in limited circumstances. One such exception is when disclosure is required by law—for example, pursuant to a valid court order or a judicial warrant.
Providers should be aware that administrative warrants issued by immigration authorities alone typically do not meet HIPAA’s “required by law” standard. In such instances, providers should consider verifying whether the request is supported by sufficient legal authority before disclosing patient information. Internal policies and staff training may help ensure that any disclosures are appropriately limited in scope and consistent with federal and state privacy laws.
Facility Access and On-Site Enforcement Activity
In some cases, immigration officials or other law enforcement personnel may seek to enter a healthcare facility to interview or take custody of an individual. Providers should consider preparing for such scenarios by identifying points of contact for handling law enforcement inquiries, establishing protocols for reviewing documentation, and confirming when legal counsel should be contacted.
Importantly, hospitals and other emergency care providers remain obligated to comply with the Emergency Medical Treatment and Labor Act, which requires the screening and stabilization of patients seeking emergency care, regardless of their background or circumstances.
Nondiscrimination and Access to Care
Providers that participate in Medicare or Medicaid are also subject to federal nondiscrimination requirements under the Civil Rights Act and Section 1557 of the Affordable Care Act, as well as state civil rights laws. These laws generally prohibit denying care on the basis of national origin or perceived immigration status. Healthcare organizations may wish to review their policies to ensure they reflect these ongoing obligations.
State and Local Considerations
In addition to federal law, healthcare providers should consider any applicable state or local requirements related to law enforcement interactions, patient rights, or data privacy. Several state attorneys general and regulatory agencies have issued advisories or guidance materials to assist providers in navigating these issues. For example, Maryland’s attorney general released guidance for Maryland providers in light of the recent policy changes on immigration enforcement. Reviewing such materials in consultation with counsel may help organizations develop compliant, well-informed operational protocols.
Conclusion
As enforcement practices evolve, healthcare providers would benefit from reviewing their procedures for responding to law enforcement activity—particularly in contexts involving patient privacy, facility access, and legal process. A proactive approach can help ensure compliance with relevant laws and support the delivery of uninterrupted, nondiscriminatory care.
Providers with questions about specific scenarios or legal requirements are encouraged to consult our team to assess how these considerations apply in their jurisdiction and operational context.
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Judge Blocks DHS Secretary Noem’s Termination of Venezuelan TPS
Recission of Temporary Protected Status (TPS) for approximately 350,000 Venezuelans has been halted temporarily. U.S. District Court Judge Edward Chen’s Order applies to Venezuelans who registered for TPS under the Oct. 3, 2023, designation of Venezuela for TPS. National TPS Alliance, et al. v. Noem, et al., No. 25-cv-01766 (N.D. Cal. Mar. 31, 2025).
Before the issuance of the Order, these individuals faced the loss of their TPS-based work authorizations on April 2 and the expiration of TPS itself on April 7. They will now remain in TPS and authorized to work for the duration of the court order.
The Order gives DHS one week to file notice of appeal and the plaintiffs one week to file a motion to postpone Secretary Kristi Noem’s decision to rescind Haiti’s TPS designation, currently set to expire Aug. 3, 2025.
Judge Chen found Secretary Noem’s recission of Venezuela’s TPS designation a violation of the Administrative Procedure Act (APA) and the Equal Protection Clause of the 14th Amendment.
Judge Chen wrote that Secretary Noem’s recission of Venezuela’s TPS designation “threatens to: inflict irreparable harm on hundreds of thousands of persons whose lives, families, and livelihoods will be severely disrupted, cost the United States billions in economic activity, and injure public health and safety in communities throughout the United States.”
He stated that DHS had failed to identify any “real countervailing harm in continuing TPS for Venezuelan beneficiaries” and that plaintiffs will likely succeed in showing that Secretary Noem’s decision is “unauthorized by law, arbitrary and capricious, and motivated by unconstitutional animus.”
The Order does not address Secretary Noem’s Mar. 25, 2025, announcement that humanitarian parole, and related work authorizations, for citizens of Cuba, Haiti, Nicaragua, and Venezuela (also known as the CHNV program) will expire on April 24, 2025, or the expiration date of individuals’ humanitarian parole, whichever occurs first.
Navigating the Termination of CHNV Parole Programs: Insights on I-9 Reverification and INA Compliance for Employers
On March 25, 2025, the Department of Homeland Security (DHS) announced the termination of the parole processes for citizens or nationals of Cuba, Haiti, Nicaragua, and Venezuela (CHNV parole programs). This decision will affect employers who must navigate the employment eligibility of affected individuals while ensuring compliance with anti-discrimination provisions outlined in the Immigration and Nationality Act (INA). The termination of these programs means that any parole status and employment authorization derived through CHNV parole programs will end by April 24, 2025. Employers must take steps to manage the reverification of affected employees’ employment eligibility without engaging in discriminatory practices.
Understanding the Challenges
As part of the CHNV parole programs, employment authorization documents (EADs) issued to beneficiaries bear the category code (C)(11). However, this code is not exclusive to CHNV beneficiaries, making identification difficult. Additionally, some CHNV beneficiaries may have updated their Forms I-9 with EADs that have validity dates extending beyond April 24, 2025. Employers who wish to ensure compliance face a complex challenge: how to identify affected employees for reverification without inadvertently violating the INA’s anti-discrimination provisions.
Employers who complete and retain paper I-9 forms, do not keep copies of identity and employment authorization documents, and do not participate in E-Verify may find the process particularly challenging. Sorting and extracting Forms I-9 based on “Foreign Passport and Country of Issuance” in Section 1, or by identifying Forms I-9 listing EADs in Section 2, may result in List A displaying overly broad findings, as these methods may capture individuals who are not CHNV beneficiaries and who hold valid employment eligibility.
Legal Compliance Considerations
The INA’s anti-discrimination provisions, particularly 8 USC § 1324b(a)(1)(A) and (a)(6), prohibit employers from treating employees differently based on citizenship, immigration status, or national origin. Employers are also prohibited from requesting additional or different documentation from employees based on these factors. The Department of Justice’s Immigrant and Employee Rights (IER) Section, formerly the Office of Special Counsel (OSC), has emphasized that employers should avoid making employment decisions—including reverification processes—based on an employee’s citizenship, immigration status, or national origin.
In the meantime, employers should consider:
Maintaining thorough records of the reverification process to demonstrate compliance with federal requirements and anti-discrimination provisions.
Conducting internal audits to ensure that no employees are treated differently based on citizenship, immigration status, or national origin during the reverification process.
Providing training to HR personnel and compliance teams on how to handle reverification without violating INA provisions, emphasizing the importance of treating all employees consistently and fairly.
Tracking the expiration dates of employees whose employment eligibility needs to be reverified.
Notifying affected employees of their upcoming need to provide updated documentation, regardless of their citizenship or immigration status. Do not request specific documents or additional information beyond what is required.
Key Takeaways
This issue represents new territory which has not been thoroughly analyzed or reviewed to date by authorities. IER technical guidance may be forthcoming on what U.S. employers should do if a particular classification of employment eligibility is suddenly terminated by the government, but some beneficiaries in that classification have updated their Forms I-9 with employment authorization validity dates that go beyond the termination date (April 24, 2025).
DOL’s Office of Foreign Labor Certification Implements Program to Delete FLAG Cases Older Than Five Years
As of March 27, 2025, the U.S. Department of Labor’s (DOL) Office of Foreign Labor Certification (OFLC) has started deleting case records that are more than five years old from the Foreign Labor Access Gateway (FLAG) system.
Quick Hits
The National Archives and Records Administration (NARA) Records Schedule mandates that records classified as “temporary” be deleted after their retention period ends.
Case records older than five years from the date of final determination within the FLAG system will be deleted.
Deleted case records are permanently irretrievable from the FLAG system.
Only case records older than five years from the date of final determination within the FLAG system will be deleted and will include the following case types:
Prevailing Wage Determinations
Labor Certification Applications (H-2A, H-2B, CW-1 visas)
Labor Condition Applications (H-1B, H-1B1, and E-3 visas)
Pursuant to NARA requirements, OFLC gave notice on February 14, 2025, that it would start deleting records from the FLAG system that were more than five years old on March 20, 2025. OFLC later stated that it would delay the start of the deletion until March 27, 2025. In the notice, stakeholders were encouraged to download any impacted records before March 27 because deleted records will be permanently irretrievable from the FLAG system once deleted.
The deleted records from the FLAG system will likely have minimal impact on employers or current visa holders, as these documents are normally downloaded from the system for use in immigration petitions. The common threshold for employer immigration compliance audits is five years.
USCIS Completes Fiscal Year 2026 H-1B Lottery
On March 31, 2025, U.S. Citizenship and Immigration Services (USCIS) announced the completion of the initial selection process for the H-1B regular cap and master’s cap for fiscal year (FY) 2026.
Utilizing its electronic preregistration system to conduct the random selection lottery, USCIS confirmed that notifications regarding the selection results had been sent to registrant employers and their representatives through their respective USCIS accounts.
Quick Hits
USCIS has received enough H-1B registrations for unique beneficiaries to meet the annual cap.
Petitioners will have at least ninety days, beginning on April 1, 2025, to file a completed H-1B petition for each selected beneficiary.
Employment in H-1B status can begin no earlier than October 1, 2025.
USCIS announced that it had selected enough registrations projected to meet the congressionally mandated H-1B cap, including the advanced degree exemption (master’s cap) for fiscal year (FY) 2026. USCIS confirmed that it had used its electronic preregistration system to conduct the random selection of electronic registrations.
Registrants’ online accounts will display a registration status indicating they have been selected to file an H-1B cap petition. The status for registrations that were not selected as part of the initial random selection process (and not denied or invalidated) will remain as “Submitted.”
USCIS confirmed that registrants will have a minimum of ninety days, beginning April 1, 2025, and lasting until at least June 30, 2025, to file complete H-1B petitions for beneficiaries selected in the FY 2026 lottery. Additionally, USCIS specified that petitioners must provide the applicable selection notice, evidence of the beneficiary’s valid passport or travel document that was used during registration to identify the beneficiary, and evidence to establish eligibility for H-1B petition approval.
Employment under an approved FY 2026 H-1B petition can begin no earlier than October 1, 2025.
If USCIS does not receive enough H-1B petitions during the registration period to meet the H-1B annual limit, it may conduct a second lottery.
Staying Compliant in a Changing Landscape: I-9 Audit Best Practices for Employers
Ensuring compliance with Form I-9 requirements has never been more critical. With shifting immigration policies, heightened enforcement priorities, and the introduction of new executive orders, employers face increasing challenges in verifying employment eligibility accurately and lawfully. Mistakes in completing or maintaining I-9 forms can result in hefty fines, legal penalties, and reputational damage.
Employers should take swift action now to conduct I-9 audits given the Trump Administration’s immediate actions to change or influence U.S. immigration policies, to remove undocumented aliens from the U.S., and recent efforts to change programs governing who has authorization to remain or work in the U.S. Several of the Day One Executive Orders remind employers and immigrants that faithful execution of immigration laws of the U.S. is of utmost importance to the administration.
Also, the far-reaching Protecting The American People Against Invasion Executive Order revokes Biden-era immigration enforcement priorities, announces the obligation that anyone without immigration status registers with the U.S. government, and seeks to limit the use of parole and temporary protected status, among other immigration initiatives.
From an employer’s perspective, an individual lacking U.S. work authorization may include an individual who:
Crossed the border undetected and did not present documents at the time of hire,
Was asked for proof of identity and employment verification documentation and subsequently presented fake documents to secure employment, or
Initially entered lawfully or changed status lawfully, but overstayed their lawful status and work authorization lapsed, or
Was admitted to the U.S. under a lawful program or status administered under the previous administration, but that program was terminated, and work authorization has lapsed, but they have continued working.
Another Day One Executive Order Securing Our Borders – The White House indicates in Section 2 that the Trump administration will remove promptly all aliens who enter or remain in violation of Federal law, and Section 2(e) indicates the administration will pursue criminal charges against illegal aliens who violate the immigration laws; and against those who facilitate their unlawful presence. The executive order also instructs the Secretary of Homeland Security to take all appropriate action to terminate categorical parole programs including the parole program for Cubans, Haitians, Nicaraguans, and Venezuelans.
Based on a notice published in the Federal Register on March 25, 2025, the above-referenced temporary parolees whose parole has not already expired by April 24, 2025, will have status (and therefore work authorization) terminated as of that date. Similarly, those who have previously been granted Temporary Protected Status through the 2023 TPS designation for Venezuela are now in limbo following publication on February 5, 2025, of a Federal Register Notice ending the 2023 TPS designation for Venezuela. Although this action is being challenged in federal court, the employment authorization documents issued under that designation are set to expire on April 2, 2025.
With programs ending, enforcement priorities changing, and lawsuits determining the future of certain work authorization, it’s increasingly difficult for the most well-meaning employer to know whether their I-9s have been completed correctly.
Employers likely are familiar with the I-9 requirements, but based on the increased emphasis on enforcement, it’s worth reminding employers that by signing the I-9, employers are attesting under penalty of perjury the following:
That they have examined the documentation presented by the employee, and
The documentation appears to be genuine and to relate to the employee named,
To the best of their knowledge, the employee is authorized to work in the United States,
That the information they enter in Section 2 is complete, true, and correct to the best of their knowledge, and
That they are aware that they may face civil or criminal penalties provided by law and may be subject to criminal prosecution for knowingly and willfully making false statements or knowingly accepting false documentation when completing Form I-9.
Current instructions for the I-9 may be accessed here: Instructions for Form I-9, Employment Eligibility Verification.
As a reminder, it is unlawful for an employer to hire, recruit, or refer for a fee a foreign national knowing they are unauthorized to work in the U.S., and it is unlawful for a person or company to continue to employ a foreign national in the U.S. knowing they are(or have become) unauthorized to work in the U.S. Audits of I-9 Forms are one way for employers to see how well their teams are tracking expiration dates and maintaining records. Note that penalties for I-9 violations have been adjusted for inflation. Here is a representative selection of penalties:
Penalty
Legal Reference
New penalty as adjusted by the final rule
Civil Penalties for I-9 paperwork violations
8 CFR 274a.10(b)(2)
$288-$2,861
Civil penalties for knowingly hiring, recruiting, referral, or retention of unauthorized aliens—Penalty for first offense (per unauthorized alien)
8 CFR 274a.10(b)(1)(ii)(A)
$716–$5,724 (first order)
Penalty for second offense (per unauthorized alien)
8 CFR 274a.10(b)(1)(ii)(B)
$5,724–$14,308
Penalty for third or subsequent offense (per unauthorized alien)
8 CFR 274a.10(b)(1)(ii)(C)
$8,586-$28,619
Document fraud (first offense)
8 CFR 270.3(b)(1)(ii)(A)
$590-$4730
Immediately Minimize Risk Through Preventative Measures.
Employers may minimize risk and fines or penalties by regularly conducting I-9 audits. Please see specific recommendations below.
Conduct Regular Self-Audits. Establish a cadence for scheduled self-audits either by the company or outside counsel.
Doing so ensures that employers are aware of any risk lurking within their I-9s in case the government were to issue a Notice of Inspection
A self-audit increases an employer’s odds of identifying and mitigating mistakes before they become an issue.
Remember, it is unlawful to continue to employ a foreign worker in the United States knowing they are (or have become) an unauthorized alien with respect to employment.
Monitor Updates. Prior to each self-audit, familiarize yourself with any updates to the Handbook for Employers M-274. For example, on March 26, 2025, USCIS announced that Section 7.4.2 of the M-274 Handbook was updated to reflect a DHS final rule automatically extending the duration of status and any employment authorization granted under 8 CFR C.F.R. 274a.12(c)(3)(i)(B) or (C) for an F-1 student who is the beneficiary of an H-1B petition requesting a change of status.
Does the person who conducts your I-9 inspections, know of this change? How do the appropriate resources on your team find out about changes to ensure compliance?
Does your team have the tools needed to perform their job? Do they have access to outside counsel?
Attend Training. USCIS offers Employment Eligibility Webinars. Take advantage of same. See Employment Eligibility Webinars | USCIS. If you have outside Counsel, have them conduct a training for your team whenever you have a change in your team who handles I-9s.
Roster of Employees. Ensure you have a complete and updated roster of employees, including former employees who left less than 1 year ago.
Retention Schedule. Ensure you are not maintaining I-9s for any longer than needed- once an employee leaves, calculate when you may stop retaining the I-9. It must be maintained for three years after the date of hire, or one year after the date employment ends, whichever is later.
Remain Diligent. Ensure signatures aren’t missed and sections aren’t blank. Do not back date documents. Know who to go to if you have questions.
USCIS Announces Completion of FY 2026 H-1B Registration Process: Filing Period Begins April 1, 2025
The U.S. Citizenship and Immigration Services (USCIS) announced today that the H-1B registration process for Fiscal Year (FY) 2026 has been successfully completed. Following a computer-generated, random selection of H-1B petitions submitted during the FY 2026 initial registration period, USCIS determined it has received sufficient electronic registrations for unique beneficiaries and has notified all prospective petitioners. The H-1B program continues to play a critical role in allowing U.S. employers to attract highly skilled talent from around the world to meet their workforce needs and drive innovation.
For those whose registrations were selected in this year’s lottery, USCIS has confirmed that the filing period for H-1B cap-subject petitions will officially open on April 1, 2025. Selected petitioners may submit their H-1B petitions, provided they meet all eligibility requirements and include the necessary supporting documentation.
Key Reminders for H-1B Petition Filings:
Compliance with USCIS Requirements: To help avoid delays or denials, petitioners must ensure that all documents are complete, accurate, and submitted to the correct filing location or online in compliance with USCIS guidelines. Petitioners must submit evidence of the beneficiary’s valid passport or travel document used at the time of registration to identify the beneficiary.
Timely Filing: Petitions must be filed within the designated filing period, at least 90 days, as late submissions will not be accepted.
As the filing period begins, we encourage petitioners to remain proactive and organized to facilitate a smooth petition submission process. For registrants who were not selected in this year’s lottery, we understand the challenges this outcome may present. Employers and prospective employees may want to explore alternative visa pathways or other strategies to achieve their hiring and professional goals. As the FY 2026 H-1B process progresses, USCIS may hold additional lotteries if the agency determines that it has not received enough petitions to meet the annual H-1B cap.
What to Know About International Travel by Employees with Work Visas
We have previously written about the steps employers should take to ensure I-9 compliance and prepare for immigration site visits. In light of new immigration guidelines impacting visa holders, employers also should prepare for travel outside the U.S. (whether for personal or business reasons) by their employees with work visas.
Visa holders traveling outside of the U.S. for the first time on a new visa have to get their visa stamped at a U.S. Embassy or Consulate in order to return to the U.S. — recent immigration policy changes and changes to the visa processing procedure may cause delays in employees returning to the U.S. (and to work) from international travel.
First, in an executive order on January 20, 2025, President Trump ordered that all immigrants should be “vetted and screened to the maximum degree possible.” H-1B visa and other work visa holders traveling abroad, to get their visas stamped, will likely be subject to increased scrutiny under this directive. Employers should expect that more visas will be placed in “administrative processing,” in which the consular officer requires additional information from sources other than the visa holder to determine eligibility. Administrative processing can result in long delays, during which time visa holders cannot return to the U.S.
More recently, on February 18, 2025, the Department of State (DOS) announced changes to the Visa Interview Waiver, or “dropbox,” eligibility requirements. The dropbox process allows visa holders to get their visas stamped without attending an in-person visa interview, greatly reducing processing times for those eligible. Previously, the dropbox process was open to visa holders whose last visa expired within the prior 48 months. DOS has now reverted to pre-COVID guidelines, reducing the 48-month limitation to just 12 months and further limiting eligibility to visa applicants seeking approval in the same category as their prior visa. In other words, an H-1B holder can only use the dropbox process if they have a prior H-1B visa that expired within the last 12 months. An H-1B holder who previously held an F-1 (student) visa or whose prior visa expired more than 12 months ago is not eligible for the dropbox process. As a result, employers can expect that more employees will be required to attend visa interviews in person.
The visa stamping process is already fraught with long wait times, especially in countries where U.S. consulates process large numbers of visas, like India. With these changes, employees with work visas — and their employers — should be prepared for extended wait times for visa appointments, as more visa holders are required to attend in-person interviews. Employers also should be prepared for the risk that employees will “get stuck” abroad for weeks, or even months, if their visa is placed in administrative processing.
Here are some steps employers can take to prepare for the risks of international travel by employees with work visas:
Remind employees to notify the appropriate employer representative well in advance of international travel. Employers should ensure that employees who are not eligible for the dropbox process timely schedule a visa interview that coincides with their travel.
Confirm that the employee’s current job details match their latest visa filing to avoid any delays in processing. Material changes in the employee’s job, location, or pay may require an updated filing.
Consider how to respond if an employee “gets stuck” while awaiting administrative processing or delays in visa interviews. Employers may decide to require these employees to use paid time off or unpaid leave to account of the additional delays. However, employees who “get stuck” may ask to work remotely from their home country while awaiting a decision. Employers should consult with counsel before agreeing to allow employees to work remotely from a foreign country, as such extraterritorial work typically raises tax and other employment law compliance implications.
Stay on top of developments in immigration law, including travel bans, that may impact international travel by employees.
UK Business Immigration – New Law on Right to Work Checks for Workers: Makes Sense in Principle but Tricky in Practice
The government has announced the latest instalment in its ‘crackdown’ on illegal working by extending right to work checks to businesses hiring gig economy and zero-hours workers. In principle, this is logical and reasonable – prevention of illegal working should rightly apply to anyone working in the UK regardless of their worker status label. However, any change in the law must be supported by carefully-drafted guidance (which hasn’t always been the case in this area). Many businesses who fall foul of the UK’s complex right to work rules are certainly not ‘rogue’ employers, but just in dire need of clear guidelines on what they need to do.
Under s.15 and s.21 of the Immigration, Asylum and Nationality Act 2006, employment of an adult subject to immigration control who does not have permission to work or is working in breach of their visa conditions exposes the employer to a civil penalty (currently set at a maximum of £60,000 per person) and/or a range of other sanctions including an unlimited fine, business closure, director disqualification and potential prison sentence of up to 5 years. S.25(b) IANA specifies that employment for these purposes is “employment under a contract of service or apprenticeship, whether express or implied and whether oral or written”. UK businesses are therefore currently only at risk of sanctions in relation to employees working illegally but the Home Office has been trying to close this loophole for some time.
In September 2024, the Home Office updated its Right to work checks: an employer’s guide to state: “Where the worker is not your direct employee (for example, if they’re self-employed), you are not required to establish a statutory excuse, but you must still carry out these checks (and retain evidence you have done so) to comply with your sponsor duties.”
As this appeared to conflict with the provisions of IANA, we contacted the Home Office to clarify what this wording meant for organisations who do not hold a sponsor licence. Wording later on in the same guidance states that employers are strongly encouraged to carry out checks even on those workers who are not employees and on contractors and labour providers but stops short of imposing any obligations.
In February just gone, the same part of the employer’s guide was amended to read: “Where the worker is not your direct employee (for example, if they’re self-employed), you are not required to establish a statutory excuse. However, you must still carry out these checks (and retain evidence you have done so) if you are a sponsor licence holder and are sponsoring the worker to ensure compliance with your sponsor duties.” In other words, no checks are required on workers, other than in circumstances where they are sponsored.
The government’s latest announcement will require it to change IANA and given the specific reference to gig economy and zero hours workers in the announcement, it will also need to give some careful thought to the following:
Will the changes only apply to gig economy and zero hours workers or to all other workers including agency workers and freelancers in any type of business? How do you define a ‘gig economy worker’?
Will employers be required to carry out checks on existing workers or just those hired on or after the date of implementation?
Will right to work checks apply to the genuinely self-employed and if not, how will employers, let alone the Home Office, differentiate them from workers? Dozens of decided cases around the gig economy, including at the highest levels within the UK legal system, have failed to come up with a definitive test for what separates a worker from the genuinely self-employed. There is also no definition at law of “gig economy”. So a business which uses outsourced labour faces a nearly impossible choice (maybe that’s the point — it’s hard to tell). It has to decide between (i) maintaining the line that its associates are fully self-employed and so their right to work compliance is not its responsibility on the one hand or (ii) doing the checks to avoid time at HM’s pleasure, so tacitly accepting that they are workers, which then pulls down upon itself all sorts of liabilities in relation to holiday pay, auto-enrolment contributions, minimum wage, etc., that it could perhaps otherwise have avoided. Damned either way, it seems.
Could we end up with a requirement to carry out checks on anyone who provides any sort of service for payment regardless of status – your plumber, builder, taxi driver etc? No doubt the Home Office would laugh at the idea as patently silly, as indeed it is, but that is the logical extension of these new requirements unless and until there is the clearest line drawn in law between who is covered and who is not – just saying “workers and gig economy people” won’t cut it for that purpose as what is covered by one is still being litigated and the other has no definition at all. It is also unclear whether there will be any overlap in law or principle with the tax position – for example, if the supply to you of a particular contractor is caught by IR35 (in other words, he is deemed to be doing work akin to that of an employee), would that mean that these new duties apply? Or if he is a sole trader working in his own name, do these new obligations depend on whether he can show that you are just one of a number of customers for his trade or profession or on how much work he does for you in a week, a month or a year? Will we see a resurgence of the issue of economic dependency? This all sounds a bit shrill, but unless there is proper clarity attached to these extended obligations, operating them will be a nightmare for employers. The line between worker and fully self-employed is extremely thin and can depend on relatively minute facts, the relevance of which could easily escape the average employer. The only completely safe course will be to make as many of those workers into Schedule E employees as possible, so putting the obligation to do the checks beyond argument but at the same time imposing significant costs and loss of flexibility on businesses. It is of course government policy to push as many people as it can into tax-paying employment (hence the proposal to drop worker status altogether in due course) so this may be seen as consistent with that direction of travel. The issue will be how much of a mess is created for employers in the meantime, and in the absence of that very clear guidance, the answer to that seems likely to be “far more than could ever have been thought necessary”.
Will the obligation still sit with labour providers to carry out checks on the employees it provides to its clients or will both parties need to carry out their own checks? If the latter, will both parties be liable for a civil penalty in the event of illegal working? We foresee some interesting contractual tussles over where that liability may fall as between the parties.
What action should employers take?
Although the planned changes appear to be aimed at employers which intentionally breach their immigration duties, all organisations with overseas workers are likely to be affected, since the Home Office has shown limited ability to distinguish effectively between the politically-essential “rogue employers” and those doing their best in a bewildering blizzard of law and guidance — compliance action and fines are often issued to well-intentioned and generally diligent sponsors which have unwittingly fallen foul of their increasingly byzantine immigration obligations. Of the hundreds of cases we have advised on (many of them for large, professional organisations), almost all arise out of a genuine oversight on the part of the employer, combined with an often understandable lack of awareness of the prevention of illegal working rules. Whilst ignorance is rightly not a valid defence to compliance, the UK immigration system remains complex and constantly changing. Employers should not assume for a moment that the stated focus on intentional breach will avail them in any way.
It’s not clear when the changes will be implemented but UK businesses which hire anyone who is not an employee should:
Consider the extent of their non-employed work force and the checks that are currently done on them
Review relevant right to work procedures and the resources needed to extend them to workers (and, potentially, the self-employed)
Given the Home Office’s ongoing ‘crackdown’, ensure that their right to work procedures (for the entire workforce, including employees) are clear, robust and effective
The UK’s right to work rules are not straightforward, nor the penalties for tripping over them trivial – training and legal support is a worthwhile investment.
What’s Changing to H-1B Cap Gap for F-1 Students?
Takeaways
The new DHS rule extends the H-1B Cap Gap period from 10.1 to 04.1.
F-1 students with pending or approved H-1B petitions benefit from this extension.
Employers must adjust their processes to comply with the new rule.
The Department of Homeland Security (DHS) has published a final rule (89 FR 10354) that significantly changes the H-1B Cap Gap period. This rule automatically extends the duration of status and any employment authorization granted under 8 CFR 274a.12(c)(3)(i)(B) or (C) for F-1 students who are beneficiaries of H-1B Change of Status petitions.
The key change is that the automatic extension end date has been moved from Oct. 1 to April 1 of the fiscal year for which H-1B status is being requested or until the validity start date of the approved petition, whichever is earlier. This adjustment aims to provide a smoother transition for F-1 students moving to H-1B status.
This change is particularly beneficial for F-1 students, who often face a gap in their employment authorization between the end of their academic program and the start of their H-1B employment. Extending the Cap Gap period to April 1 allows students to maintain their status and continue working without interruption.
This new rule aligns with the broader efforts to modernize and improve the efficiency of the H-1B program, as outlined in the DHS’s final rule published on Dec. 18, 2024.
Employers should take note of these changes and adjust their processes accordingly. It is crucial to ensure that all relevant documentation reflects the new Cap Gap period and that any necessary updates are made to employment verification systems.
For more detailed information, refer to the DHS’s final rule and the USCIS news release. These resources provide comprehensive guidance on the new regulations and their implications for both employers and F-1 students.
USCIS Begins Announcing H-1B Registration Selections for FY 2026
U.S. Citizenship and Immigration Services (USCIS) has begun notifying petitioners of selected registrations for this year’s H-1B cap lottery. This marks a pivotal step in the FY 2026 H-1B visa process, as registrants who have been selected are now eligible to proceed with filing their H-1B cap-subject petitions on April 1 (earliest date).
The H-1B program remains one of the most sought-after avenues for U.S. employers to hire highly skilled foreign professionals in specialized fields such as technology, engineering, health care, and others. This year’s process follows the electronic registration system implemented by USCIS, which streamlines the initial stage of the H-1B lottery by allowing employers to submit registrations electronically for a chance to be considered in the cap selection.
For those whose registrations have been selected, the next step is to prepare and submit a complete H-1B petition to USCIS within the designated filing period. Petitioners are encouraged to ensure that all required documentation is accurate and submitted in a timely manner to avoid delays or denials.
For those whose registrations were not selected, USCIS may hold additional lotteries if the agency determines that it has not received enough petitions to meet the annual H-1B cap. Petitioners should monitor updates from USCIS in the coming months.
Employers and registrants may review their accounts on the USCIS online portal to check the status of their registrations. Notifications of selection are being issued electronically, and selected registrants will see their status updated to “Selected.” Those who have not been selected will see a status of “Not Selected” once the selection period has concluded.
The H-1B visa process is an opportunity for U.S. employers to address skills gaps and access global talent, but it is also a highly competitive process. Those with questions about preparing a petition or navigating next steps should consider consulting with an experienced immigration attorney or advisor to ensure compliance and maximize their chances of success.
For more information about the H-1B program and updates from USCIS, visit the official USCIS H-1B Cap Season webpage.