H-1B Visa Reform Act of 2004 Provided 20,000 More H-1B Numbers for Graduates of U.S. Advanced Degree Programs in Addition to the 65,000 H-1B Annual Numerical Limitation

Although the H-1B Visa Reform Act has provided 20,000 more H-1B numbers (in addition to the 65,000 annual quota), these provisions have yet to be implemented by the United States Citizenship and Immigration Services (“USCIS)”). The situation begs the question, how many visas will really be made available to us before October 1? The process by which the numbers become available is still a mystery. In Fiscal Year (“FY”) 2005, H-1B petitions valid for initial employment had an annual ceiling of 65,000. The USCIS is required to adhere to the H-1B numerical limitation. In fiscal years 2002 and 2003, this numerical limit was capped at 195,000, up from the 107,500 limit for FY 2001, and 115,000 limit for FY 1999 and FY 2000. However, this numerical limit was brought down to the pre-FY 1999 limit of 65,000, affecting H-1B employers starting in FY 2004. The Act provided that the new numbers would be available to petitioners on March 8, 2005, however, this has not yet occurred. The overriding question for us at GT this first quarter has been when the numbers would become available and what impact, if any, this would have on April 1, 2005 filings for the new fiscal year beginning in October. The USCIS has indicated that the additional 20,000 numbers would be available to any H-1B applicant, however, there have been conflicting unofficial comments that indicate that these additional numbers could be limited to holders of U.S. advanced degrees.

The March 8th date has come and gone, USCIS issued a press release instructing petitioners to delay new petitions filing until an announcement was published in the Federal Register with specific instructions. As we go to press nothing has been issued. In fact there is a great deal of political maneuvering going on behind the scenes to change USCIS initial statement allowing any potential H-1B holder to file for these additional numbers. So while the discussions go on behind the scenes, we lose precious time and wait it out. The USCIS has also indicated that it inadvertently exceeded the 2005 quota by 10,000 numbers, approving 75,000 new H-1B petitions, rather than the quota mandated 65,000. This discovery has led to further background discussions that 10,000 numbers maybe deducted from the additional allocation and only 10,000 new visa numbers made available for use prior to the new fiscal year. Senator Chambliss sent a letter to USCIS’ Director Aguirre reiterating that the Congressional intent was that an additional 20,000 visa numbers be available for this fiscal year, however, the agency has not yet indicated what position they will take on this issue.

The available number of visas for this fiscal year was so low that on October 1, 2004, the first day of FY 2005, the cap was reached. The FY 2004 cap was hit on February 17, 2004, eight months prior to the start of FY 2004. As noted above, the agency may have overreached in counting last year and may have approved about 10,000 H-1B petitions beyond the quota of 65,000.

The question that remains is when any additional numerical allocation may become available, if the full 20,000 visa numbers will be available, and if all applicants who qualify for H-1B status will be eligible to take advantage of these numbers. We will keep you apprised of further developments on H-1B availability.

Other highlights of the Act that affect your company

The H-1B Reform Act of 2004 requires that H-1B employers pay 100% of the prevailing wage as opposed to the previous ability to pay of 95% of the wage from a governmental or independent wage survey. Further, this provision now mandates that the Department of Labor use or make available to employers a governmental survey to determine the prevailing wage that provides four levels of wages commensurate with experience, education, and the level of supervision. This is good news for most employers because it is reflective of real world practices and takes into account more factors in determining wages.

The bad news is that the American Competitiveness Work Improvement Act (“ACWIA”) training fees were added back into the filing fees and employers are hit with a $1500 fee, $750 for businesses with fewer than 25 employees. More bad news for employers with a significant H-1B workforce is the reinstatement of H-1B dependency provisions.

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