• H1B Cap Exempt
  • September 12, 2016 | Author: Alexander Joseph Segal
  • Law Firm: The Law Offices of Grinberg & Segal, PLLC - New York Office
  • What is the H1B Cap?

    Under section 214(g)(1)(A)(vii) of the Immigration and Nationality Act (INA), only 65,000 H1B visas may be allocated each fiscal year. This is commonly called the “H1B cap.” The H1B cap applies to H1B3 fashion models of distinguished merit and ability as well. There is an additional set aside of 20,000 H1B visa numbers for applicants who possess a master’s degree or higher from a United States institution of higher education. However, once those 20,000 H1B visas have been allocated, even applicants with advanced degrees from U.S. institutions of higher education are placed in the general pool of H1B applicants. Because there is far more demand than supply for the 65,000 available H1B visa numbers each year, the H1B cap serves as a barrier between many otherwise qualified applicants and H1B status.

    What is the H1B Cap Exemption?

    There is a limited class of H1B petitions that are cap exempt. In order to fall under the cap exemption, the petition must be filed by an H1B cap exempt employer for employment for such employer.

    What are the H1B Cap Exempt Employers?

    The statute describing who is eligible for an H1B cap exemption is found in section 214(g)(5)(A)-(B) of the INA.
    • A. Institution of Higher Education or a Related or Affiliated Nonprofit Entity
    Under section 214(g)(5)(A), an alien who is employed or has received an offer of employment from an institution of higher education or a related or affiliated nonprofit entity is exempt from the H1B cap.

    The term “institution of higher education” is defined by statute in 20 U.S.C. 1001. Generally, the school must be accredited by a nationally recognized accrediting agency or association or must have preaccreditation status from an agency or association recognized by the Secretary of Education for granting preaccreditation status. The institution must be a public or otherwise nonprofit institution and must meet certain requirements in the programs that it offers.

    Under 8 C.F.R. 214.2(h)(19)(iii)(B), in order to be considered a “related or affiliated nonprofit entity,” the entity must be connected to the institution of higher education through (1) shared ownership or (2) control by the same board or federation, or it must be (3) attached to the institution of higher education as a member, branch, cooperative, or subsidiary.
    • B. Nonprofitt Research Organization or Governmental Research Organization
    Under section 214(g)(5)(B) of the INA, an alien who is employed or who has received an offer of employment from a nonprofit research organization or a governmental research organization is exempt from the H1B cap.

    Under 8 C.F.R. 214.2(h)(19)(iii)(C), a “nonprofit research organization” is defined as an organization that is primarily engaged in basic and/or applied research. A “governmental research organization” is a U.S. government entity which has the primary mission of performing or advancing basic and/or applied research.
    • C. General Tax Exempt Status Requirement
    In order to be an H1B cap exempt employer, 8 C.F.R. 214.2(h)(19)(iv) requires that the organization have been approved as a tax exempt organization for research or educational purposes. This means that even if the organization is tax exempt, it will not qualify if it is tax exempt for purposes other than for research or education. Such petitioners are also exempt from certain additional filing fees under 8 C.F.R. 214.2(h)(19)(iii).
    • D. H1B Cap Exempt Petition Filed by Non-Qualifying Private Employer
    In certain cases, an H1B petition may be considered cap exempt even if it is filed by a private employer that would not qualify as an H1B cap exempt petitioner. These scenarios are listed in a 2008 United States Citizenship and Immigration Services (USCIS) Memorandum titled “Guidance Regarding Eligibility for Exemption from the H1B Cap based on § 10 of the American Competitiveness in the Twenty-First Century Act of 2000 (AC21) (Public Law 106-313).” In short, the petition may be considered H1B cap exempt if the beneficiary will work at, but not for, a qualifying institution. However, the Memorandum specifically requires that the beneficiary’s proposed employment must be furthering “the essential purpose, mission, objectives, or function” of the qualifying institution or organization. This means that merely working at the location of such an institution is not in and of itself sufficient for a petition to be considered H1B cap exempt.

    Other Considerations

    H1B cap exempt employees may port their H1B petitions to a different cap exempt employer if otherwise eligible to do so. Such an exercise of H1B portability will not make the new portability petition cap subject. However, if the H1B cap exempt employee seeks to port to a cap subject employer and if his or her underlying petition was never counted against the H1B cap, he or she may only apply to port the petition when H1B numbers are still available. Furthermore, the H1B employee would be ineligible to begin employment with the cap subject employer until approval of the new petition i. However, an H1B cap exempt employee is not cap subject if he or she obtains concurrent cap subject employment while working for a cap exempt employer, so long as he or she is still primarily employed by the cap exempt employer (see USCIS PM 70/6.2 (May 30, 2008)).

    Conclusion

    Being eligible for cap-exempt employment offers those seeking to employ H1B workers or those seeking H1B status a significant advantage over cap subject H1B applicants. The H1B cap prevents many people who otherwise meet the requirements for H1B status from obtaining a H1B visa each year. However, an H1B cap exempt employee should be aware of the limitations on exercising H1B portability during the first six years on H1B status. Furthermore, it is important to consult with an experienced immigration attorney for guidance on accepting concurrent employment with a cap subject H1B employer without violating status.

    Before seeking to employ a foreign worker or immigration status as a foreign worker, it is well advised to consult with an experienced immigration attorney. In addition to offering guidance through the application process, an experienced immigration attorney will be able to assess whether the H1B visa is the optimal avenue for achieving immigration results for the petitioner and beneficiary, and whether the employer and proposed employment may qualify for an H1B cap exemption.