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USCIS Guidance
on H1B Cap Exemptions
Posted
Jun 16, 2006
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The USCIS issued guidance in a memo on June 6, 2006 regarding H1B petitions
that are eligible for exemptions from the H1B numerical limits (H1B cap).
Given the problems that many employers and individuals are facing because of
the H1B cap having been met, this guidance is important for eligible cases.
The matter addressed in the guidance is the meaning of the exemption for
cases based upon an "offer of employment 'at' an institution of higher
education, a related or affiliated nonprofit entity, a nonprofit research
organization, or a governmental research organization." One of the key
points is the use of the word "at" rather than "by" regarding the nature of
the required employment. This has resulted in the interpretation by many attorneys that avails their
clients of this exemption when
petitioning employers are not cap exempt, but for whom the employment is physically performed at an H1B-exempt employer's location. The Memo
clarifies that this is permissible and establishes the parameters.
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Interpretation of "AT an Exempt Institution"
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The Memo addresses the fact that the word "at" is used regarding the
exemption, rather than "by," as mentioned above. The USCIS acknowledges that
this reflects a congressional intent to exempt foreign nationals who are not
employed by exempt institutions, but who, nonetheless, perform employment
that directly and predominantly furthers the essential purposes of such
qualifying institutions. Third-party employers, therefore, can utilize this
exemption if a foreign national is physically working at an exempt
institution and has a job that "directly and predominately furthers the
normal, primary or essential purpose, mission, objectives or function of the
qualifying institution." The third-party employer must show a logical nexus
between the work of the beneficiary and the normal work of the qualifying
institution.
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Reasoning Behind USCIS Interpretation
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The USCIS notes that, in many situations, qualifying institutions have
contracts with third-party companies for onsite placement of workers. These
employees perform jobs that otherwise would be performed by employees of the
qualifying institution. Thus, they are doing work that was important to
Congress in creating the H1B exemptions.
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Definitions Contained in the
Law
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Institution
of Higher Education - Whether or not an
institution qualifies as an institution of higher education is governed by
the Higher Education Act of 1965. This definition includes educational
institutions in any state that:
a) admit
only students who have graduated from secondary schools or the equivalent;
b) are
legally authorized within their respective states to provide programs of education
beyond secondary education;
c) provide
educational programs for which the institutions award bachelors' degrees or
provide programs of not less than 2 years that are acceptable for full
credit toward bachelors' degrees;
d) are
public or other nonprofit institutions;
e) are
accredited by nationally recognized accrediting agencies or associations, or
have been granted pre-accreditation by recognized agencies or associations
and will meet the accreditation standards within a reasonable time.
Affiliated or
Related Nonprofit Entity
- The Memo states that the USCIS will follow a definition contained within
the regulations for affiliated nonprofit entity. This regulation states that
it is sufficient if the nonprofit entity is connected to the institution of
higher education through shared ownership / control, or attached to the
institution of higher education as a member, branch, cooperative, or
subsidiary.
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Nonprofit Research or Governmental Research
Organization - The law also
defines the requirements for research organizations. These must be
organizations primarily engaged in basic or applied research. Governmental
research organizations are U.S. government entities whose primary mission is
the performance and/or promotion of basic and/or applied research. The
law also defines basic research as being
general research to gain more comprehensive knowledge, without specific
applications in mind. It can include sciences, social sciences, or
humanities. Applied research is research to gain knowledge or understanding
to determine how to meet a specific, recognized need.
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Examples of Employers Exempt from the H1B Cap
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The Memo provided some typical examples, applying the H1B cap exemptions.
These are presented in question-and-answer format below.
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Question 1. Company A, a nonexempt employer, files an H1B for an
employee. The employee's duties will be performed onsite at a qualifying
government research organization (B), as part of a joint agreement between A
and B. Company A supports the H1B petition with proof that the employee will
work on a research project, performing duties similar to those performed by
the employees of Organization B, and that this work is related to
Organization B's mission. If B filed the H1B petition, the exemption would
apply. Will the Company A case fall under the exemption?
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Answer : Yes, the beneficiary would be exempt from the H1B cap, because
s/he will perform research duties that would otherwise have been performed
by the qualifying institution's employees, in furtherance of the
institution's mission.
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Question 2. Company B, a for-profit hospital / research center (not a
qualifying institution), files an H1B on behalf of a renowned oncologist,
who will be a direct employee of the hospital, and who will be treating
cancer patients and doing research on a new medication. Additionally,
Company B has a relationship with a qualifying, nonprofit research
organization. Through this organization, Company B occasionally provides
resources and data as part of a cooperative exchange. The oncologist will
spend 55 percent (majority) of her time working onsite at the nonprofit
research organization, conducting research and experiments on the new
medication. The work would not be typical of that conducted by the research
organization's employees, but would be directly and predominantly furthering
the organization's normal and essential purpose and objectives. Would this
case fall under the exemption?
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Answer : Yes, the oncologist's work fulfills the mission of the
qualifying institution. The oncologist spends more than half of her time
physically onsite "at" the qualifying entity, and there is a sufficient
nexus between the oncologist's work and the purpose of the nonprofit
organization.
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Comment : This example is interesting
because of the fact that it is not necessary to work at the qualifying
institution 100 percent of the time; more than half time is sufficient, as
long as the work meets the requirement of having a nexus to the mission of
the qualifying organization.
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Question 3. Dr. X has completed a fellowship at a university medical
center. Following the fellowship, he will be working for a private medical
group that has offices within the university medical center and both
entities train medical students and treat patients in the center. The doctor
will be on the medical center's faculty, among other duties, but will be
employed by the private group. Would this case qualify for the exemption?
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Answer : Yes, the case would be exempt because the work performed is
directly furthering the work of the medical center.
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Comment : This is a rather typical
example that we see at the Murthy Law Firm. There are many examples of
private medical practices employing physicians that physically work at
qualifying hospitals.
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Question 4. Company D is a nonprofit market research firm that would
not qualify for the exemption. They file an H1B for an employee. The
employee will be conducting market research onsite at a university that does
qualify for the exemption. The employee will be accessing a research tool
available only through the university. However, the research is for the
benefit of the petitioner's clients, not the university. Would this H1B be
cap exempt?
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Answer : No, the employee is physically working at an exempt
institution, but the work performed is in no way related to the purposes of
the qualifying entity. The employer, not the university, benefits from this
work.
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Conclusion
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This guidance from the USCIS is helpful. With the regular H1B cap closed as
of May 26, 2006, under the quota for the 2007 Fiscal Year, the available
exemptions open options for some H1B employers and employees. The more
expansive terminology of employed "at" rather than "by" can be quite helpful
in the types of scenarios described above, as well as other situations
involving people working at qualifying hospitals, universities, and research
organizations. It is also helpful to have confirmation that the work is
sufficient, if performed more than 50 percent of the time at the exempt
location, as there are situations in which the work is primarily, but not
exclusively, performed at the exempt location.
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