September 2, 2005

The H1B Quandry: My H1B Is Subject to the Cap and Was Filed on August 10. 2005 - Now What?

The annual cap on the H-1B category dropped to 65,000 beginning with the 2003 fiscal year, after reaching its highest point of 195,000. This drastic drop has impacted not only foreign nationals but the U.S. employers in a number of industries that depend on this additional source of highly skilled labor. By now most are aware of the fact that for the 2006 fiscal year, H1B visa numbers ran out on August 10, 2005. This limit of course applies only to new H1B visa numbers for foreign nationals who have not held H1B status. It also applies to foreign national who are in H1B status but whose H1B sponsor is currently an exempt organization (university, nonprofit research organization, etc.).

Given this drop in available numbers, each year we seem to hit the cap earlier and earlier as employers and foreign nationals frantically rush to file their petitions before numbers run out. Last year the H1B cap was reached on October 1st , this year August 10th, should we expect that next year it will be July or maybe even June? Employers can start filing for the new fiscal year beginning April 1st, will there be a mad rush across the nation causing the visa numbers to max out earlier and earlier each year? Without additional numbers or carve outs like the one made for individuals with U.S. graduate degrees, this seems to be the trend. With this trend, each year individuals who are not able to file their petitions before the cap will now have to scramble searching for other options and strategies that will not result in having to leave the country and lose an opportunity they worked so hard to obtain. And on the other side employers sit by the sidelines seemingly helpless as they lose talented professionals that contribute to their enterprise and to the U.S. economy by allowing us to remain globally competitive and to address the needs and demands of our nation.

So if your H1B petition was received on August 10th, what now? Basically, following new regulations published in May 2005, the USCIS will be completing their new "lottery" process. All petitions received on that day, those for which USCIS case numbers have been assigned as well as those that have not been assigned, will all be included in the general pool from which USCIS will randomly select H1B petitions to fill the last remaining numbers for the 2006 fiscal year. Petitions not selected are slowly being returned.

USCIS is continuing to process H-1B petitions for foreign nationals that are exempt from the general cap allocation. Foreign nationals exempt from the general cap include:

1. Individuals who already hold H-1B status and are extending their existing status.
2. Individuals who already hold H-1B status and are changing the terms of employment or employers.
3. Individuals who will be hired for positions at an institution of higher education or a related or affiliated nonprofit entity, or at a nonprofit research organization or a governmental research organization.

In addition, processing of H-1B petitions for numbers set aside and limited exemptions also continues, these include:

1. Chilean and Singaporean nationals under the additional quota designation under the Free Trade Agreements with those countries.
2. FY05 and FY06 H-1B petitions filed on behalf of foreign nationals who have earned a U.S. master’s or higher degree. In this category, USCIS indicates that there are just under 10,000 cap numbers for FY05 (employment start date before October 1, 2005) and 12,000 cap numbers for FY06 (employment start date after October 1, 2005).

GT continues its efforts with the Compete American Coalition to craft legislative remedies to alleviate the burden the H-1B cap imposes on U.S. businesses. We urge employers to get involved and voice their concerns to their representatives.