January 2007 Newsletter
Reminder - H-1B Cap

January 11, 2007
By Robert D. Aronson

This update is being provided to remind current, past and potential clients of Aronson & Associates that the H-1B application period will open as of April 1, 2007. Although H-1B positions subject to the cap cannot actually begin until October 1, 2007, it is important to file the petition as far in advance as possible, owing to the anticipated high demand on the finite number of H-1B visas. Last year, the H-1B cap was reached toward the end of May; this year, we expect an exhaustion of these numbers at an even earlier point in time. Therefore, we encourage employers to make hiring plans and job offers now in order to file their H-1B petitions as soon as possible after April 1, 2007.

If you have questions about the H-1B cap and/or wish to discuss the impact of the H-1B cap on any foreign national workers that you anticipate hiring during the next year, or on your own case, we encourage you to contact us.

What is the H-1B Cap?

The H-1B cap is the annual limit of 65,000 new H-1B visas that are available each federal fiscal year. The maximum level of 65,000 H-1B visas is set by Congress. The actual number of usable H-1B visas is less than this figure since certain free-trade agreements with Chile and Singapore borrow a portion of the H-1B numbers under the cap. As a consequence, the number of available H-1B visas for the worldwide quota actually stands at 58,200 (although there is a slim possibility that unused free trade "H-1B1" visas will be added back into the cap at the end of the fiscal year).

Additionally, there are an extra 20,000 H-1B visas available for foreign workers who have graduated from a US college or university with a Masters or higher degree (such as a Ph.D., J.D., LL.M., M.D.).

What kinds of prospective employees does the H-1B cap apply to?

Generally, the H-1B cap applies to any first-time H-1B applicant or to foreign nationals already holding H-1B status who are moving from university to non-university employment. For example, the H-1B cap applies to F-1 students who have "optional practical training" (OPT) employment authorization cards and need to change into H-1B status for the first time. It applies to university researchers who are moving into employment in the for-profit sector. It also applies to prospective hires who are overseas and have never worked in the United States in H-1B status before. It also applies to most corporate hires who have previously resided in the United States under any visa status other than H-1B status.

It is important to consult with legal counsel to determine whether or not an individual case is subject to the H-1B cap.

What is the difference between "start date" and "filing date" for new H-1B workers?

At this present moment, there are no more new H-1B visas available for a foreign national worker to either enter the United States or receive a "change of status" to start work any earlier than October 1, 2007. In certain situations, certain foreign workers might be "cap exempt" (see further below). However, the vast majority of foreign workers that private for-profit companies seek to hire are subject to the H-1B cap. We refer to this most common category of foreign workers as being "cap-subject."

No foreign worker who is cap-subject can obtain H-1B status and start working before October 1, 2007. By law, H-1B petitions can be filed up to six months prior to the requested start-date for the H-1B status. Therefore, to have H-1B status starting on October 1, 2007, employers can file H-1B petitions starting on/after April 1, 2007.

In past years, when the H-1B cap was three times (3X) higher than now, employers were not under pressure to make decisions to hire foreign workers and file H-1B petitions during any particular time frame. In those past years, H-1B visas remained available year-round and thus the decisions to recruit and hire foreign nationals did not have to be timed to coincide with the cap. However, for the past three fiscal years, the H-1B cap has been exceeded each year. What is worse, the H-1B cap has been reached faster and faster each year. Unfortunately, the H-1B cap was reduced to its current level of 65,000 as of October 1, 2003, and with this reduction started this current and maddening situation of oversubscription of the H-1B numbers.

Three years ago, the H-1B cap was reached six months after the April 1 filing date; two years ago, the H-1B cap was reached four-and-a-half months after April 1; last year, the H-1B cap was reached a mere six weeks after April 1. While we obviously do not know when the cap will be reached this year, we believe that the cap will be reached even earlier than was the case last year. As such, the lesson of recent history is to file H-1B petitions as soon as possible after April 1 so as to maximize the chances that an H-1B number will be available so as to enable the petition to be approved.

What does the H-1B cap mean for you or your company?

It is not possible to predict exactly how soon after April 1, 2007 that the H-1B cap for Fiscal Year 2008 will be reached. Last year, even with the existence of the extra 20,000 H-1B visas for US-earned Masters or higher degree holders the cap was reached on May 26, which was the earliest date yet on which these numbers were exhausted.

For employers that anticipate a need to hire any foreign nationals who will need H-1B status on or after October 1, 2007, our firm recommends that the interviewing and selection processes should be finalized at this time. Cap-subject job offers should be made with a clear understanding that the worker will not be able to start work prior to October 1, 2007. Once the hiring decision is finalized, all parties should take prompt and appropriate steps to prepare and file the H-1B petition on or shortly after April 1, 2007 while numbers are available.

What kinds of cases are exempted from the H-1B cap?

Certain kinds of H-1B cases are exempted from the cap. We will just briefly summarize the cap exemption grounds here. If you are uncertain whether a potential H-1B case is exempt from the cap or not, we encourage you to contact our office, as the determination of whether or not a case is H-1B cap subject or cap exempt will in large measure determine the strategy and timing of the case.

The following kinds of cases are exempt from the H-1B cap:

• Employment at an institution of higher education, or a non-profit entity that is related or affiliated to an institution of higher education;
• Employment at a non-profit research organization or a governmental research organization;
• Employment of an H-1B worker who has already been counted against a previous year’s H-1B cap and who has not left the United States for at least one year.

Determining whether the H-1B cap applies to an individual worker (or whether exemption from the cap can be claimed) is a complex legal question that requires examination of the particular facts and immigration history of the individual that a company is considering hiring. As a recipient of this email, you are welcome to contact us if you have any questions about the information contained in this email and how it may affect any specific prospective hire you anticipate in the coming year. Thank you.

Robert D. Aronson

This notice one of a series of communications prepared as a general public service to our clients and friends. The information herein presented is not intended nor should it be utilized as legal advice on any specific situation. Furthermore, given the rapid pace of change, the veracity of this information is constantly subject to modification and/or reversal. Rather, this notice represents a good faith attempt to orient clients and other interested parties served by Aronson & Associates to current immigration developments, in this case the relevance of the H-1B cap to hiring decisions. This notice in no manner supercedes the need to seek competent legal advice when engaged in activities carrying possible immigration-related consequences. This notice does not create an obligation on behalf of Aronson & Associates to file any H-1B petition before the cap is reached, absent a properly executed Contract for Legal Services following a consultation concerning a specific case.