The H1B latest news that the Department of Homeland Security is studying a proposal to abolish H1B visa extensions beyond the standard 6 year maximum has caused widespread media coverage and concern. If the Trump administration were successful in implementing this new policy, the change could trigger self deportation of hundreds of thousands of mostly Indian and Chinese H-1B visa holders waiting for their permanent residency to be approved.
While DHS has many ways to unilaterally affect visa processing and hinder immigration, an analysis of the applicable statutes indicates it is highly unlikely DHS can stop issuing extensions without Congressional approval.
AC-21 Defines two different means for H1B visa extensions
The Federal laws governing H-1B visas are contained in the American Competitiveness in the Twenty-first Century Act（AC-21）, passed in October 2000. The key statutes that govern H1B visa extensions beyond the 6 year maximum are as follows:
1）Three year extensions：Section 104（c）
"... any alien who ... is eligible ... may apply for, and the Attorney General may grant, an extension of such nonimmigrant status until the alien’s application for adjustment of status has been processed and a decision made thereon."
Section 104（c）three year extensions are based on an approved form I-140 immigrant petition for alien worker with a non-current priority date. The words "may grant" provide USCIS some discretion on whether to approve extension requests. Although USCIS has historically not used this discretion to deny H1B extension requests made under 104（c）.
If the Trump administration tries to reverse the 17 year precedent of approving extensions, it would have to be based on some objective criteria. Any such proposed criteria would be under intense scrutiny and would very likely face a flood of lawsuits challenging it in Federal courts.
2）One year extensions：Section 106（b）
"The Attorney General shall extend the stay of an alien who qualifies for an exemption under subsection（a）in one-year increments until such time as a final decision is made on the alien’s lawful permanent residence."
Section 106（b）one year extensions are based on a labor certification or form I-140 petition being filed at least 365 days prior. Section 106（b）does not provide USCIS discretion on approving extension requests. The statute is clear that these extensions will continue until a decision is made on the alien's permanent residency.
The latest H1B self deportation news is not true. An analysis of American Competitiveness in the Twenty-first Century Act shows that the Trump Administration cannot stop extending H-1B visas and deport 500,000 Indian tech workers.
DHS would need Congress to amend AC-21
There has been significant pushback from members of Congress on DHS's reported proposal and major tech companies are poised to jump into the fray should DHS try to implement their controversial proposal. US Representative for Hawaii Tulsi Gabbard called the proposed rule changes "draconian," saying they would only "tear families apart, drain our society of talent and expertise, and damage our relationship with an important partner, India," according to the Hindu American Foundation.
So far, the current administration has taken many actions to slow legal immigration and make things more difficult for foreign nationals to work in the US. But targeting tech workers deemed so valuable that companies want to go through an expensive process to keep them would be misguided. Fortunately constitutional separation of powers ensure that Congress would have to amend immigration laws before radical new changes such as those proposed by DHS could be enacted. Any attempt by DHS to unilaterally stop extending H1B visas would likely overstep their authority and be stopped by Federal courts.
1/9/18 Update：Under intense pressure from business & tech communities, USCIS announced they are backing away from the proposed policy change to halt H1B extensions.
According to McClatchy DC, one source familiar with the discussions said DHS reached out to lawyers to verify claims by immigration attorneys about the illegality of the proposed change and were told that even if the administration was correct, another provision would still likely allow foreign workers to keep their visas in one-year increments.