Filing H-1B Petition After Cap Is Reached

May an employer file an H-1B petition even if the cap has been met? With the 65,000 annual quota for the cap-subject H-1B petitions for fiscal year 2014 already reached, an employer should determine if the petition is subject to the numerical limit.

Based on USCIS data, approximately 124,000 H-1B petitions were received during the first week of the filing period that ended on April 5, 2013. These included petitions filed under the advanced degree exemption.

Since the number of H-1B petitions exceeded the annual quota, the USCIS conducted an H-1B lottery on April 7, 2013. The H-1B lottery is a computer-generated selection process which was last used in 2008. The USCIS first used the lottery process to select the 20,000 petitions under the advanced degree exemption. Then, it randomly selected the 65,000 cap-subject petitions. Petitions under the advanced degree exemption which were not selected were also included in the lottery for the cap-subject petitions.

The petitions not selected in the lottery process as well as those filed after the final receipt date were rejected and returned with the filing fees. The USCIS however announced that it would continue to accept cap-exempt petitions.

A petition is cap exempt if the current H-1B worker has already been counted against the cap. This is the case where the petition filed on behalf of the H-1B worker is (1) to extend his stay in the U.S., or (2) change the terms of his employment, or (3) change employers, or (4) allow him to work concurrently in another H-1B position.

Petitions for new employment are exempt if the beneficiary will work at an institution of higher education or a related or affiliated nonprofit entity, a nonprofit research organization, or a governmental research organization.

In order to qualify as an “institution of higher education”, the institution must admit only high school graduates, is legally authorized to provide education beyond secondary education, provides bachelor’s degree programs or not less than 2-year programs that can be credited towards such a degree, is a public or nonprofit organization and accredited by a nationally recognized accrediting agency.

To be a related or affiliated nonprofit entity for purposes of the H-1B exemption, it must be connected or associated with an institution of higher education through shared ownership or control by the same board or federation; or be operated by the institution; or be attached to the institution as a member, branch, cooperative or subsidiary.

In a case that our office handled a few years ago, a dental intern petitioned by a nonprofit community health center was granted H-1B status under this exemption because we were able to prove by an institutional agreement and contract of services that the clinic was affiliated with the University of Massachusetts.

The USCIS is currently revisiting its position on this exemption category. It will however grant the exemption to those who have been previously granted exemption as “related or affiliated nonprofit entities” after June 6, 2006 unless there is a “significant change or clear error in prior adjudication.”

If the USCIS finds that there is a significant change or clear error in the adjudication, it will not grant the exemption. The reorganization of the entity as a for-profit entity, expiration of the affiliation not automatically renewed and affiliation with a different institution as basis for exemption are evidence of significant changes which may lead to denial of the exemption.

A nonprofit research organization is an organization engaged in basic research and/or applied research. A government research organization is a U.S. entity engaged in the performance or promotion of basic research and/or applied research.

J-1 physicians who have obtained a Conrad 30 waiver are also cap exempt.