Major Changes to the H-1B Program: Cap Exceeded on April 1, 2016!
For the fourth year in a row, the 65,000 cap on H-1Bs available during the Fiscal Year (October 1, 2016 to September 30, 2017) was exceeded on April 1st (an H-1B application can be filed up to six months prior to the intended start date). USCIS received approximately 236,000 H-1B petitions during the filing period. On April 9, 2016, USCIS used a computer-generated random selection process (commonly known as a "lottery") to select a sufficient number of petitions needed to meet the caps of 65,000 for the general category and 20,000 under the advanced degree exemption limit. Petitions not randomly selected were rejected and returned with filing fees. USCIS conducted the selection process for advanced degree exemption petitions first. All advanced degree petitions not selected were part of the random selection process for the 65,000 limit.
What is the H-1B cap?
There is a "cap" on the number of H-1Bs available every fiscal year (October 1st to September 30th of the following year). There are 65,000 H-1Bs available to anyone who qualifies, and an additional 20,000 H-1Bs available only to those with an advanced degree from a U.S. educational institution. Since an H-1B petition may be filed up to six months prior to the requested start date, H-1B petitions for FY 2018 (October 1, 2017 to September 30, 2018) may be filed starting on April 1, 2017. Since H-1B numbers have run out on the first for the past several years, it is crucial to plan ahead and prepare to file any H-1B petition subject to the cap by April 1st.
What is the H-1B lottery?
When the 65,000 and 20,000 H-1B caps are exceeded on April 1st (as has been the case for the past several years), USCIS uses a computer-generated random selection process (commonly known as a "lottery") to select a sufficient number of petitions needed to meet the caps of 65,000 for the general category and 20,000 under the advanced degree exemption limit. Petitions not randomly selected are rejected and returned with filing fees. USCIS conducts the selection process for advanced degree exemption petitions first. All advanced degree petitions not selected are part of the random selection process for the 65,000 limit.
Who does the H-1B cap affect?
Given that the total H-1B cap is only 85,000, managers, recruiters, and human resource departments planning to bring a foreign national from overseas to work in the United States on an initial H-1B visa need to be aware of the H-1B cap. Additionally, the H-1B cap also affects foreign nationals in some other nonimmigrant status such as B, F, J or H-4 who request a change of status to H-1B.
Who is not affected?
The H-1B cap does not affect foreign nationals currently in H-1B status who need to file an extension of status or change of employer. Further, foreign nationals seeking employment through institutions of higher education, nonprofit research organizations, and government research organizations will continue to be exempt from the H-1B cap.
Other H-1B changes were implemented by the H-1B Visa Reform Act of 2004. These provisions include the additional requirements that H-1B "dependent" employers are required to meet, along with the Labor Department's expanded investigatory authority to investigate possible H-1B violations without first having to wait for a complaint to be filed.
Additionally, the H-1B Visa Reform Act exempts from the H-1B cap the first 20,000 beneficiaries who have earned a Master's or higher degree from a U.S. institution of higher education. After those 20,000 slots are filled, USCIS is required to count those cases against the 65,000 cap for the remainder of the fiscal year.
The H-1B Visa Reform Act also implemented two additional filing fees. The first fee is used by the Department of Labor to administer programs that involve the training and education of U.S. workers. Petitioners who employ more than 25 full-time employees must pay a fee of $1,500; petitioners who employ 25 or fewer full-time employees may submit a reduced fee of $750. Certain types of petitions are exempt from the new $1,500 or $750 fee. The $1,500 or $750 fee applies to any non-exempt petitions filed with USCIS after December 8, 2004.
The second fee is a "Fraud Prevention and Detection Fee" of $500 which must be paid by all petitioners seeking a beneficiary's initial grant of H-1B or L nonimmigrant classification, or those petitioners seeking to change a beneficiary's employer within those classifications. Other than petitions to amend or extend status filed by an existing H-1B or L employer, there are no exemptions from the $500 fee. The $500 fee applies to all petitions filed with USCIS on or after March 8, 2005.
How did this situation arise?
In 1990 Congress imposed a numerical cap on the number of H-1B visas issued each fiscal year. The first cap set H-1B numbers at 65,000 annually. In the thriving economy of the late 1990s, the cap was prematurely reached in FY 1997, FY 1998, FY 1999, and FY 2000. Once a fiscal year's cap was reached, all additional H-1B petitions were returned until a new fiscal year began, thus causing significant strain on U.S. businesses. To alleviate this problem, Congress raised the fiscal year cap to 115,000 for FY 1999 and FY 2000, and then to 195,000 for FY 2001-2003. However, barring Congressional action, the cap will remain at 65,000.
Given the situation, it is crucial that you act now! There are several things you should be doing today to ensure that you will be able to hire the employees you need. Please call us immediately to discuss the best strategy for your company.