Can You Still File for H1-B?

The H-1B cap for fiscal year 2007 was reached last May 26—about four months before the numbers become available when the US Citizenship and Immigration Services (USCIS) begins its fiscal year on October 1. This means the USCIS is no longer accepting petitions for H-1B as it had determined that those in the pipeline would exhaust the H-1B cap for fiscal year 2007. With the cap reached, many employers who need the foreign professionals are wondering if it is still possible to file for H-1B.

Visa Cap Bad for the Economy

There were never enough H-1B visas in recent years to meet the demands of the US economy. Since the H-1B cap reverted to 65,000 in fiscal year 2004, the need for more H-1B numbers had progressively worsened and reached a point that US businesses are complaining now more than ever.

Even Microsoft Chief, Bill Gates, made a rare visit to Washington, D.C. at the height of the Senate immigration debate in March to lobby for more H-1B visas. Gates said that the “high skills immigration issue is by far the no. 1 thing. This is gigantic for us,” according to news accounts.

The annual cap for H-1B visas was initially set at 65,000 under the Immigration and Nationality Act of 1990. The economic boom, however, left a job market void for more foreign professionals that US employers could not fill because of the numerical restriction.

Temporary Fix

In response, Congress passed the American Competitiveness in the 21 st Century Act, which provided for an increase in the H-1B cap to a total of 195,000 over three fiscal years. This law, however, was a temporary fix that failed to provide a lasting solution to US employers’ need for foreign professionals. There were no congressional efforts to extend the effectivity of the increased H-1B cap, and as a consequence, the annual cap dipped back to 65,000 by FY 2004.

The FY 2004 cap was reached on February 1, 2003 or barely five months into the fiscal year, while the FY 2005 cap was reached on the first day of the fiscal year itself, that is, on October 1, 2005. The FY 2006 cap was reached on August 10, 2005 or about a month before the fiscal year began.

H-1B Cap Exemption

With the need for H-1Bs getting particularly bad this year, US businesses are starting to utilize barely-noticed provisions in the rules that could exempt them from the H-1B cap and enable them to hire foreign professionals. This prompted the USCIS to issue a memo on June 6 that would serve to guide the USCIS adjudicators on the applicability of the H-1B cap exempt rules.

Two factors come into play in determining whether an H-1B petition is cap exempt or not: first, the nature of the employer and second, where the H-1B beneficiary will render his/ her services.

Under H-1B regulations the numerical cap does not apply if the employer is either of the following: (a) an institution of higher learning; (b) a nonprofit entity related or affiliated with an institution of higher learning; (c) nonprofit research organization; or (d) governmental research organization.

Institution of Higher Learning

In determining whether an employer is an “institution of higher learning,” the USCIS refers to the definition of the Higher Education Act of 1965 (Pub. Law 89-329), which basically defines such education institution as one that meets the following requirements: first, it admits high school graduates only; second, it is legally authorized to provide a program of education beyond high school; third, it provides a bachelor’s degree program or at least a 2-year program that can be credited toward a bachelor’s degree; fourth it is a public or other nonprofit institution and lastly, it is accredited or pre-accredited by a nationally-recognized accrediting agency.

Affiliated Entity

To establish the qualifying affiliation or relation to an institution of higher learning, a nonprofit employer must present proof of “shared ownership or control by the same board or federation operated by an institution of higher education.” Such employer may also present evidence of its attachment to the institution of higher education as a “member, branch, cooperative or subsidiary.”

Research Organization

A nonprofit research organization must be “primarily engaged in basic research and / or applied research.” In a similar vein a governmental research organization is a “United States Government entity whose primary mission is the performance or promotion of basic research and/or applied research.”

The second factor that comes to play is whether the beneficiary will be “employed (or has received an offer of employment) at” the entities described above. Many employers question whether this casts a wider net of qualification than if the alien was to be “employed by” such entities.

Indirect Employer

According to the USCIS memo, Congress intended to exempt aliens who are to be employed “at” a qualifying institution from the cap. In other words, the qualifying institution need not be the direct employer of the alien beneficiary. This allows certain aliens to be considered cap exempt even if their direct employer is not a qualifying institution.

The petitioner has the burden of proving that the alien beneficiary will be performing job duties at a qualifying institution. It is not enough, however, that the job duties of the alien are being physically performed at the qualifying institution. Such duties must “directly and predominately further” the primary purpose of the qualifying institution.