H1B 2005 Cap Very Close
Posted Sep 10, 2004
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As regular visitors to MurthyDotCom and subscribers to the MurthyBulletin were informed in our NewsFlash, the USCIS released an official announcement on September 7, 2004 that, as of August 18, 2004, they had received 45,900 Fiscal Year (FY) 2005 cap-subject H1B cases. Readers who have been closely following the cap know that this is 5,900 cases more than were filed as of August 4, 2004. Since there are only 65,000 cap numbers for FY2005 (October 1, 2004 to September 30, 2005) this means that the numbers are running out very quickly. Moreover, since 6,800 of the cap numbers are reserved for Chile and Singapore under Free Trade Agreements, the true cap is only 58,200. Although some of the unused Chile and Singapore numbers may be added back in, the numbers are uncertain.
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Who is Subject to the Cap?
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Essentially, there is a limit to the number of new (first-time) H1B cases that can be approved each fiscal year. Persons for whom an employer is seeking an H1B for the first time, such as students moving from Optional Practical Training (OPT) to H1B, must have a cap number available in order for the employer to gain approval of the H-1 petition. The same is true of cases filed for persons coming from abroad who have not previously held H1B status. Other typical situations include medical doctors moving from J-1 to H1B, persons changing from L-1 to H1B; or derivative spouses, such as F-2s, H-4s, and L-2s seeking to obtain H1Bs for the first time. Also subject to the cap are those who have held H1B status before, who were not previously counted against the cap due to the nature of their employers. If one works for a cap-exempt employer on an H1B and later decides to move to a cap-subject employer, s/he becomes subject to the cap. The same is true for persons counted against the cap who leave the United States for a year or more.
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What Types of Employers are Exempt?
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There is a very limited group of employers that are cap exempt. These are set out on the I-129W Form, which is part of the H1B filing. H1B cap-exempt employers include non-profit and government-research organizations, and colleges / universities and their affiliates. Affiliates of universities often include teaching hospitals. It should be noted that the exemption for non-profits is quite limited; it does not cover all non-profit organizations, although this is a common misconception.
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Which Individuals are Cap Exempt?
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There is no profession or position that is cap exempt. People are only cap exempt due to either the nature of the employer, as described above, or if they were counted against the cap previously and have not been outside of the United States for a one-year period. (This means physically out of the U.S. for a 365-day period.) Additionally, petitions filed for physicians who were granted J-1 waivers under the Conrad State 30 program for work in shortage / underserved areas are cap exempt.
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Current Students / OPT
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Many students who were facing the end of their OPT periods prior to October 1, 2004 have already become the beneficiaries of H-1 cases for FY2005. Some of these students were able to bridge any gap in their status under the Notice issued by USCIS on July 23, 2004. [See our July 26, 2004 article, F-1 / J-1 Gap Relief Clarified Further, available on MurthyDotCom.]
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Many other students with OPT expiring later in 2004 or in early-mid 2005 have urged their employers to file H1B cases for them in advance, in order to avoid problems with the cap. That is, for example, persons with OPT expiring in January 2005 are requesting that their employers file their H1B cases now, so that they will not fall out of status or have to depart the United States when their OPTs expire. Unless there is a legislative change, once the cap is reached, there will not be new H1B numbers available until October 1, 2005. H1Bs cannot be filed more than six months before the start-date of the anticipated employment.
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At The Law Office of Sheela Murthy, we are starting to receive questions from 2004 graduates who recently received their OPT cards. These usually have expiration dates in June or July 2005. Many of these people have not been employed long enough for the employers to be willing to commit to their ongoing employment by filing H1B cases on their behalf in time for the FY2005 cap. If these students wish to remain in the United States, they will be faced with the same dilemmas that faced students this year, unless there is legislative change. They will need to monitor this situation and seek advice as their OPT expirations near. At the very least, they should be able to have H1B cases filed on their behalf six months in advance (April 1, 2005), for the FY2006 cap. They will then face the problem of whether they will be able to bridge the gap in status in some way. This year, as in prior cap years, the USCIS issued a notice that helped many to bridge the gap. However, it came quite late in the process. Many already had chosen to leave the U.S. and apply for visas abroad, rather than take the chance that they would be considered out of status. Hopefully, since there is ample advance notice, the USCIS will address this matter in a more timely fashion for FY2006.
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Employers
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Once the cap is reached, employers will not be able to obtain H1Bs for persons recruited from abroad or for new graduates, unless these individuals have held H1B status in the past and are not cap subject. This may mean that employers will be unable to fill their needs for employees in IT positions, as well as in other typical H1B fields, such as architecture, engineering, academia. In this case, the U.S. economy would likely suffer, unless and until the matter is addressed and more cap numbers become available.
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The H1B cap is of key importance in immigration law. We will continue to monitor this very closely for MurthyDotCom and MurthyBulletin readers, and will provide updates as soon as reliable information becomes available.