Initial Guidance for the American Competitiveness in the
Twenty-First Century Act

The American Competitiveness in the Twenty-First Century Act ("AC21"), passed on October 17, 2000, establishes new H-1B benefits and raises the former H-1B cap. Finally, the Department of Justice ("DOJ") has published some guidance which addresses INS’ duties in implementing both AC21 and other related legislation. A brief summary of this legislation follows:

• The Changes Enacted by AC21:
  • §102 – "Temporary Increase in Visa Allotments."
    • All H-1B petitions approved after the FY 1999 cap was reached, but before September 30, 1999, are to be counted against the FY 1999 limit.
    • All H-1B petitions approved between October 1, 1999 and August 31, 2001 shall be counted against the FY 2000 cap, despite their approval dates.
  • §103 and §114 – "Exemptions from the H-1B FY Cap"
    • As of the date of AC21’s passage, these H-1B beneficiaries will not be counted towards the cap:
      • J-1s, receiving a graduate medical education, who have received the two year residency waiver.
      • Those employed by, or who have received an offer of employment from:
        • An institution of higher education or a related/affiliated non-profit entity;
        • A non-profit research organization;
        • A governmental research organization.
      • Those who currently maintain or who have held H-1B status in the last six years and are ineligible for another six year stay as an H-1B.
      • Aliens who were counted towards the cap and are beneficiaries of many petitions.
    • An employee, not yet been counted toward the cap, who then leaves the employment of an institution of higher education to work for an H-1B employer, other than one defined in §214(g)(5), will be counted toward the annual limit

• AC 21, §104(c) – "’One-Time Protection’ Benefits, Extension of H-1B Status Permitted where Adjustment Pending under Per Country Limitations."
  • H-1B nonimmigrants, with approved I-140s, who are still unable to adjust due to per-country limits, may extend their status until their adjustment is finalized, regardless of the maximum year limit set by §214(g)(4).
  • To qualify for this benefit, the alien must be:
    • The beneficiary of an employment-based ("EB") immigrant petition, already filed; and
    • Eligible for immigrant status except for the per country limits.

• To get such an extension of one’s status:
  • File Form I-129 with the necessary signature, fees and supporting documents;
  • Pay the $1,000 processing fee, following the instructions on the back of that form.
  • If the petition and the request to extend are otherwise approvable, a petition may not be denied because the nonimmigrant has exhausted the maximum stay. Extensions can be made for three years at a time.
  • An H-1B dependent’s status remains derivative.
    • NOTE: When possible, dependents should file concurrently with the principal’s petition.

• AC21, §105 – "Visa Portability"
  • Permits an H-1B nonimmigrant to begin work for a new employer once the new employer files a "nonfrivolous" H-1B petition, if:
    • The nonimmigrant was lawfully admitted;
    • The petition was filed before the end of the alien’s stay;
    • The nonimmigrant has not been unlawfully employed since admission and before filing the nonfrivolous petition.
  • Dependents will remain in H-4 status if the principal is lawfully employed.
  • Scope of §105 – while no final regulation has been issued, the INS expects to propose that H-1B beneficiaries, who are no longer working for the initial employer, be given an allotted period of time (e.g. 6o days) to begin working for a new employer.

• A nonimmigrant, claiming a right to portability benefits, must prove that he is:
  • Otherwise admissible;
  • In possession of a valid, unexpired passport and visa;
  • Previously admitted, or otherwise given, H-1B status; and
  • The prior recipient of an H-1B petition that was timely filed on his behalf.

• In order to be admitted at a PoE, Dependents of H-1Bs must prove that:
  • He is otherwise admissible;
  • He has a valid and unexpired passport and visa, unless exempt;
  • The principal nonimmigrant was previously admitted as an H-1B. If visa exempt, he must present a copy of his Form I-797.
  • An H-1B petition was timely filed on behalf of the principal nonimmigrant, before its validity dates expired. This information can be found on a dated Form I-797 receipt notice. If the applicant does not have one, he is inadmissible and should be processed accordingly; but, if an he cannot prove admissibility on a pending H-1B petition, he does not have to be processed through expedited removal.
• If the validity dates have already expired, and the applicant is unable to prove that his H-1B has been approved, he is inadmissible and should be processed accordingly.

• AC21, §106 – "Special Provisions in Cases of lengthy Adjudications"
  • Permits H-1B nonimmigrants to extend their status beyond the 6 year period, where:
    • The nonimmigrant is the beneficiary of an EB petition or an adjustment application; and
    • Over one year has passed since applying for either a labor certification or an EB petition.
  • To get an extension:
    • File Form I-129 for the nonimmigrant beneficiary and pay the $110 filing fee. The petitioner must be the alien’s current or new employer. If the extension is approved, it is valid for one year and may be made each year until a final decision is made on his immigrant petition.

• AC21, 106(c) – "Change in Employment after Adjustment Pending for Six Months"
  • The I-140 approval will remain valid, even when the alien changes jobs, if:
    • The I-485 has been filed and is not adjudicated for 180 days or more; and
    • The new job has same/similar qualifications as the first.
  • Assuming statutory compliance, the alien’s adjustment application cannot be denied solely because he changed jobs. However the applicant must notify INS when he no longer intends to enter the job which originally sponsored him. If the INS believes that the alien’s intent has changed, a Request for Evidence ("RFE") can be issued to clarify his intent.
  • Where there has been a change of employment, the INS should request a letter from the employer, verifying that the job offer exists, the job title, the job description and salary, in order to verify that the original and new jobs are similar. Still, formal regulations have not been written in order to adjudicate these benefits.

• AC21, §108 – "Recovery of Visas Obtained Fraudulently"
  • When an approved H-1B petition is revoked due to fraud or willful misrepresentation of a material fact, the H-1B cap shall be restored by one in the fiscal year in which it is revoked.

• The Influence of New, Related Legislation
  • PL 106-311:
    • Beginning December 17, 2000, the H-1B filing fee shall be $1000. This fee cannot be waived, and the employer is still precluded from requiring an alien to reimburse him for any portion of that fee.
    • As of October 17, 2000, some employers are exempt from paying this fee, including:
      • Primary or secondary educational institutions
      • Institutions of higher education
      • Nonprofit entities related to/affiliated with an institution of higher education;
      • Nonprofit entities engaged in curriculum-related clinical training of students at an institution of higher education;
      • Nonprofit research organizations; or
      • Governmental research organizations.
    • Specific guidance from the INS is forthcoming.

• PL 106-396: Exemption of Certain Employers from Requirement to File Amended Petitions
  • As of October 30, 2000, amended H-1B petitions are no longer required when the employer is involved in corporate restructuring (i.e., mergers, acquisitions or consolidations) where:
  • The new entity succeeds to the interests and obligations of the original petitioner; and
    • With the exception of the name of the employer, the terms of employment are the same.
  • The old approvals and notices remain valid, despite name changes, etc. in the entity. Therefore, the H-1B beneficiary is still admissible, so long as:
    • He is otherwise admissible;
    • He is in possession of a valid passport and nonimmigrant visa (unless exempt); and
    • He presents a letter from the new corporate entity, declaring that:
      • The new corporate entity has succeeded to the interests and obligations of the original H-1B petitioning employer; and
      • The terms and conditions of the nonimmigrant’s employment are the same as they were at the time of the application.
  • If the employer wishes, he can receive a new I –129 in the name of the new entity, if a new Form I-129 and its fee are filed with the INS.
  • More guidance shall follow regarding the necessary evidence for extension requests.