Comparison of FY2011 and FY2012 H-1B Cap Seasons

This H-1B cap season lasted approximately two months shorter than last year’s.  Last year’s (fiscal year 2011, FY2011) H-1B cap season lasted until January 26, 2011, when the H-1B quota was reached.  This year, FY2012, the H-1B cap season was two months shorter.  This can be explained in a number of ways, most notably due to the gradual improvement in the U.S. economy and increase in the rate of hiring for the next 6-12 months.  As we saw the rate of H-1B filings over the past few weeks of this H-1B cap season to increase, we expect that as the economy continues to improves over the next couple of quarters, the H-1B demand should pick up and we expect that the new H-1B cap season, to open on April 2, 2012, to be busier than the last one.

Alternatives to H-1B Cap

Now that the H-1B quota has been reached, we are receiving an increasing number of inquiries by both cap-subject employers and prospective employees about the alternatives for work authorization between now and October 1, 2012, when the new fiscal year’s H-1B quota would begin (as a reminder, April 2, 2012 is the earliest a cap-subject H-1B application can be filed).  We describe some of the most common H-1B visa alternatives.  Note that the list is not intended to exhaust all possible visa types and scenarios pursuant to which an employee may be legally employed.  Our goal is to list some of the common options for the benefit of our clients and readers.  We are happy to discuss individual cases as part of our FREE initial consultation.

Cap-Exempt H-1B

A number of employers may qualify to be cap-exempt and are allowed to file for H-1B petition at any time.   A cap-exempt employer is (1) an institution of higher education, (2) related or affiliated to a higher education institution nonprofit entity, or  (3) nonprofit research organization or a governmental research organization.  Please see our cap-exempt H-1B employer guide.   As a result, many educational institutions, non-profit and research organizations may qualify to file cap-exempt H-1Bs.   We are happy to help evaluate whether an employer can qualify to be cap-exempt.

O-1 or P-1 Extraordinary Ability Visas

O-1 and P-1 visas are generally reserved for individuals who have extraordinary ability in the sciences, arts (including the television and motion picture industry), education, business, or athletics.  By definition, not many individuals qualify for one or both of these visa types, but where possible, an application for O-1 and/or P-1 should be prepared in lieu of H-1B.   In addition to being able to obtain work authorization pursuant to these visa types, an O-1 and/or P-1 approval may establish the basis for the subsequent application for an EB-1 category permanent residency.  Please contact us if you would like our help in evaluating your O-1 and/or P-1 visa case.

L-1 Intracompany Transferree

The L-1 visa type allows multinational companies who have presence abroad to transfer their employees from their overseas offices to their U.S. office (or to establish a new U.S. office).  This visa type is a good option for foreign employers seeking to establish or boost their U.S. presence and for foreign nationals currently employed abroad.   Foreign nationals who are currently in the U.S. generally will not qualify for L-1 visa.  An added benefit to the L-1 visa is that family members are entitled to a work authorization pursuant to L-2 status.

E-1/E-2 Treaty Trader or Investor

The E-1/E-2 visas allow nationals of countries with which the U.S. has trade treaties to invest an amount in the U.S. and receive an E-1 (treaty trader) or E-2 (treaty investor) visa.  See a list of treaty countries.

The E-1 treaty trader visa is suitable if the foreign national has a multinational employer who is willing to transfer them, and the company has significant trade between the foreign country and the U.S.  The employee must also have skills which are essential to the operation of the company trade.   Dependents of E-1 visa holder are eligible for work in the U.S.

The E-2 treaty investor allows foreign nationals to invest (preferably) a substantial amount in the U.S. and obtain an E-2 visa to be able to manage and direct their investment.  The amount required for investment generally varies depending on the industry (the so called, proportionality test) with more capital-intensive industries requiring more significant investment for E-2 application.   Dependents of E-2 visa holders are eligible to apply for work authorization.

H-1B Program Changes by Congress Unlikely

While we do not expect Congress to raise the H-1B cap for FY2013, it is nonetheless possible.  There are a number of proposals currently circulating in Congress, some of which aim to increase the H-1B cap.  While none of these proposals have gained momentum at this time, we will be providing updates as soon as there is a likelihood that there will be development on this front.

Wait and File on April 2, 2012 for the FY2013 Cap

For some of our clients, waiting until April 2, 2012 to file a new cap-subject H-1B petition may be the best option.  The H-1B visa type, although subject to some requirements, is a fairly common visa type for which many qualified employees are eligible.    As of now, the FY2013 H-1B cap is expected to be the same as it was for the FY2012 fiscal year – 65,000 H-1B visas (plus 20,000 for holders of U.S. master’s degrees).  However, as the economy starts to improve and employers increase hiring, we do not expect that next year’s H-1B numbers will remain available for as much as 8-9 months, as they did this year.   Accordingly, we urge employees and employers to prepare and file most or all of their H-1B petitions on or about April 2, 2012, to ensure that their petition has the greatest chance to be included in the quota.  Please contact us to start preparing for your FY2013 H-1B cap filing.

Partially as a result of our outreach on the upcoming H-1B cap limit, we have been getting many questions on what happens when the H-1B cap is reached?  How does USCIS handle applications which are received on or after the date the H-1B cap is reached?

H-1B Applications Filed on the Day the H-1B Cap is Reached Are Subject to Random Lottery

H-1B filings which are received on the day the H-1B cap is reached are counted and, assuming the number of filed applications exceeds the remaining number of H-1B visas, USCIS conducts a random lottery to determine which of these H-1B applications would be counted and included under the cap.   Those H-1B applications which are filed on the last day but are not selected on the lottery for that last H-1B day are returned to the petitioners.

For example, if on the last day of the H-1B quota there are 700 available H-1B visas, but USCIS, on that day, receives 1,000 H-1B filings, there will be a random lottery among these 1,000 H-1B filings to determine 700 cases which will be accepted for processing under the cap.   The 300 H-1B filings not selected in this last-day lottery will be returned.

H-1B Filings Not Picked by the Last-Day Lottery or Filed Afterwards Are Rejected and Returned

H-1B cases filed on the last day of the H-1B cap but not picked by the last-day lottery (if there is one), or, H-1B cases filed after the last day are processed by USCIS to be returned to the filing petitioner employer (or their attorney) with an explanation that the H-1B cap has been reached and that there are no longer H-1B visas under this year’s cap.

Conclusion

Considering the increasing volume of H-1B filings and given our recent reports on the status of the FY2012 H-1B cap, we believe that the H-1B cap will be reached by the end of November 2011.    We will continue providing updates on the H-1B cap and, once it is reached, on possible alternatives.   If you need our help and services, please contact us at your earliest convenience

USCIS just released the information on the numbers of cap-subject FY2012 H-1Bs filed since April 1.   As November 14, 2011, USCIS has received approximately 56,300 H-1B petitions counting toward the 65,000 cap (an increase of 7,100 over the previous two weeks).  Similarly, as of November 14, there were 20,000 H-1B visas filed subject to the U.S. Masters cap which has 20,000 limit.

H-1B Quota Trends – Rate of Regular Cap H-1B Filings Increases Significantly; H-1B Masters Cap Reached

The numbers, as just reported for the past week, confirm that the rate of filing of new cap-subject H-1B filings is increasing significantly.  Now that the H-1B U.S. Master’s cap has been reached, all H-1B filings (regardless of level of education) will be counted under the regular H-1B cap.   As a result, we expect the average weekly rate of filings to be around 3,500, compared to 1,000-1,500 previously.     Additionally, we often see a rush of filings towards the end of the cap season as employers realize that the cap is about to close, so we anticipate the rate of filings to increase over the next few weeks.

H-1B Cap Likely to Close by Late November or Early December 2011 — Last Call for Cap-Subject H-1B Filings

Given an estimated rate of H-1B filings of 3,500 per week for the next few weeks, and given that there are approximately 9,000 H-1B visa numbers left towards meeting the annual cap, it is likely that the H-1B cap for FY2012 will be reached towards the end of the year — likely by the end of November or early December  2011.

Considering the fact that an H-1B petition takes at a minimum 7 to 10 business days to file, we urge all employers and future H-1B workers to start the H-1B filing process as soon as possible.    If you are considering filing a cap-subject H-1B petition as part of the FY2012 quota, please contact us.   We also invite you to subscribe to our free weekly immigration newsletter to receive timely updates on this and related topics.

H-1B Quota Trends – Rate of Regular Cap H-1B Filings Increases; H-1B Masters Cap Reached

The numbers, as just reported for the past week, confirm that the rate of filing of new cap-subject H-1B filings is increasing slightly.  Now that the H-1B U.S. Master’s cap has been reached, all H-1B filings (regardless of level of education) will be counted under the regular H-1B cap.   As a result, we expect the average weekly rate of filings to be around 3,000-3,500, compared to 1,000-1,500 previously.     Additionally, we often see a rush of filings towards the end of the cap season as employers realize that the cap is about to close, so we anticipate the rate of filings to increase over the next few weeks.

H-1B Cap Likely to Close in Mid- to Late December 2011 — Last Call for Cap-Subject H-1B Filings

Given an estimated rate of H-1B filings of 3,500 for the next few weeks, and given that there are approximately 15,000 H-1B visa numbers left towards meeting the annual cap, it is likely that the H-1B cap for FY2012 will be reached towards the end of the year — likely in mid- to late December 2011.

Considering the fact that an H-1B petition takes at a minimum 7 to 10 business days to file, we urge all employers and future H-1B workers to start the H-1B filing process as soon as possible.    If you are considering filing a cap-subject H-1B petition as part of the FY2012 quota, please contact us.   We also invite you to subscribe to our free weekly immigration newsletter to receive timely updates on this and related topics.

As of October 5, 2011, DOL has shared some important statistics about their processing of PERM and LCA filings.

PERM Updates

1. Number of filings.   There have been 65,000 PERM applications filed over the year, an increase over the previous similar period.   The number of PERM applications processed during the same period was 73,000, which makes a decrease in the backlog of PERM cases by more than 50%.   More than half (56%) of the pending cases are in analyst review stage, 3-4% are in supervised recruitment, 25% are in audit, 14% on appeal and 2-3% are in sponsorship verification.     DOL has noted that audits and supervised recruitment cases are growing.
2. Processing times.  The current processing times are June 2011 for analyst review, February 2011 for audit, April 2009 for appeals and “current” for government errors.    The desired targets for PERM cases are 90 days for analyst review and 180 days average for all PERM cases.
3. Supervised recruitment.    Audits and supervised recruitment continue to increase.   55% of supervised recruitment cases are ultimately denied (of which 84% are lower-skilled and financial industry cases).   21% are withdrawn and 24% are certified.     Areas of focus for supervised recruitment are lower-skilled positions and positions in the financial sector plus areas where there are demonstrable layoffs of workers.   According to DOL, if an area shows double-digit unemployment, then there is a higher than average PERM audit/supervised recruitment chance (after accounting for the job type, etc.) — essentially, DOL takes into account employment trends across geographic areas and employment fields.

LCA Updates

1. Number of filings.   There were approximately 360,000 LCAs processed this year, of which 100% were processed within the target 7 business day window.   Approximately 8-9% are denied and most of the denials are due to FEIN verification mismatch, wage source, tracking number problems and boxes checked on the LCA.
2. FEIN verifications.   Target of processing is two business days and the DOL Chicago processing office receives approximately 140 requests for verification daily.

Prevailing Wage Determinations

DOL stated that they continue to decrease the backlog of prevailing wage determinations and, as of the end of October 2011, all PERM prevailing wage determinations should be within the “normal” processing timeframe of 60 days.   Please see our recent article on the prevailing wage processing times.

Conclusion

We appreciate that DOL is able to release these numbers on a periodic basis because they allow us to draw some (fairly reliable) predictions on the processing times.    Based on DOL reports and based on our firsthand experience from actual cases, we anticipate that PERM cases would take approximately 3-4 months.   Unfortunately, we anticipate higher PERM audits and PERM supervised recruitment cases, especially in certain areas and certain occupations.    Finally, the prevailing wage processing times are trending down and we hope to see processing times of 30-45 days soon.

Please do not hesitate to contact us if we can be of any assistance or if we can provide case analysis as part of our free initial consultation.

The Problem – H-1B Workers Changing Job Locations

Many consulting companies who hire H-1B holders place their workers at third-party client sites.   It is very common for these H-1B workers to change projects, end clients or simply to relocate to a different client site during their H-1B validity period.   In such cases, the question arises, What should be done to ensure that the H-1B employer and employee remain in compliance with the relevant H-1B regulations?

There is fair amount of confusion among H-1B employers and workers with respect to their obligations when there is a change in the work location.   Below we discuss what has been currently the recommended approach and also what USCIS has recently announced.

Currently:  Change in H-1B Job Location Requires a New LCA

Pursuant to previous USCIS guidance, our office often advises that when there is a change in the job location, but all of the other terms of an H-1B petition remain valid — title, duties, salary — then all the petitioning employer must do is file a new LCA for the new job location(s) and ensure that the proper posting and compliance for each new LCA has been done.

This approach is supported by the Adjudicator’s Field Manual 31.2(e) which states that “[t]he mere transfer of the beneficiary to another work site, in the same occupation, does not require the filing of an amended petition provided the initial petitioner remains the alien’s employer and, provided further, the supporting labor condition application remains valid.”

The relevant regulations, in 8 CFR 214.2 specify that  “[t]he petitioner shall file an amended or new petition, with fee, with the Service Center where the original petition was filed to reflect any material changes in the terms and conditions of employment or training or the alien’s eligibility as specified in the original approved petition.”   (emphasis added).   As a result, the question becomes what is “material change.”   In light of previous guidance, a change in location only was not considered a material change.

Possible Changes in Interpretation in “Material Change” – California Service Center and Upcoming USCIS Guidance

In recent discussions with the California Service Center, some of which is prompted by a number of “Notice of Intent to Revoke” notices, it becomes apparent that the California Service Center is starting to consider a change in the job location a “material change” and, as a result, requiring an H-1B amendment to be filed.   According to the California Service Center, as of August 10, 2011, “it is the position of [California Service Center] Counsel that an amended H-1B petition should be filed if an LCA is filed after approval of an H-1B petition.”

It is worth noting that no such guidance has been issued by the other service center processing H-1B petitions – the Vermont Service Center.   As a result, an apparent conflict arises between both Service Centers — because the Vermont Service Center has not provided any guidance on the issue, it may be inferred that H-1B petitions filed with the Vermont Service Center do not require amendment when there is change in the job location.

Conclusion

We are aware that USCIS is working on official guidance on this topic which would, hopefully, provide clear guidance applicable to both service centers.  Unfortunately, there is no known or anticipated release date.   In the meantime, in abundance of caution, we are starting to recommend that H-1B amendment petitions be filed when there is a change of job location, at a minimum, for petitions with the California Service Center, but also for petitions filed with the Vermont Service Center.   If you are not sure whether a petition has been filed with the Vermont or California Service Centers, please see this guide to service centers and receipt numbers.

We invite you to subscribe to our free weekly immigration newsletter to receive timely updates on this and related topics.  In the meantime, please do not hesitate to contact us with any questions or comments, or if we can be of any assistance with analyzing or filing H-1B petitions, including amendments.

Background on the DOL Prevailing Wage Suspension

As a reminder, in August, DOL announced that they are temporarily suspending the issuance of non-H-2B prevailing wage determinations in an attempt to focus 100% of their resources towards completing the re-issuance of few thousand H-2B prevailing wage determinations under a court order.  Please see our August 2011 article on the prevailing wage suspension for more details.

Current Prevailing Wage Processing Times

As a result of the backlog of prevailing wage determinations, our expectations that prevailing wage determinations would take a significant period of time are confirmed.   Currently, we see prevailing wage determinations issued 10-12 weeks after filing of the request.   This is substantially higher than the 4-5 week average we used to see before DOL was ordered to redo previous H-2B prevailing wage determinations.   Our hope is that prevailing wage determination processing times would continue to go down as DOL is working through the backlog of requests.

Some PERM and H-1B Filings Continue to be Affected

Despite the fact that prevailing wage determinations are being issued, the delays of at least a couple of months for a prevailing wage determination remains a major concern for certain PERM/H-1B applicants who need to file their PERM/H-1B urgently.  Our office (along with many other immigration stakeholders) have voiced our concerns that many foreign workers who must file their PERM and/or H-1B in order to be able to fit within AC21 guidelines, expiring recruitment of other urgent reasons may be negatively affected by the slow processing of prevailing wages.   A proposal to DOL to create a procedure to accommodate expedited processing of prevailing wage requests has been submitted, but without any result (as of the time of this article).

Additionally, as a higher number of prevailing wage determinations are issued over the past and coming weeks, it is likely that a higher number of PERM cases will be filed over the upcoming few months — resulting in an increase in the PERM processing times over the next 6-9 months.

Conclusion

We welcome the fact that DOL has started processing and issuing prevailing wage determinations, and while we remain hopeful that DOL will continue allocating resources to bring prevailing wage processing times down to a month, we remain concerned that a number of foreign workers may lose PERM/H-1B benefits due to these delays.   Please do not hesitate to contact us if we can be of any assistance or if we can provide case analysis as part of our free initial consultation.

USCIS just released the information on the numbers of cap-subject FY2012 H-1Bs filed since April 1.   As of September 23, 2011, USCIS has received approximately 36,300 H-1B petitions counting toward the 65,000 cap (an increase of 4,100 over the previous two weeks).  Similarly, as of September 23, there were 17,700 H-1B visas filed subject to the U.S. Masters cap which has 20,000 limit (an increase of about 1,000 over the previous two weeks).

H-1B Quota Trends – Slow Rate of Filings; Regular Cap H-1B Filing Slightly Up; H-1B Caps Are Likely to Remain Open for Several Months

The numbers, as just reported for the past two weeks, confirm that the rate of filing of new cap-subject H1B filings is fairly slow, and remaining steady.  We have been noticing a weekly rate of filing of 1,000 to 1,500 in the regular H-1B cap, although the rate over the past month has increased slightly to 1,500-2,000 per week.  The rate for the U.S. Masters H-1B cap has remained steady – at 500-700 per week.   More than six months into this H-1B cap filing season, we can draw some (fairly) reliable conclusions on how long the cap would remain open: given the rate of filings for the past several weeks and since the H-1B cap opened, it is likely that the H-1B cap would remain open well into 2012.

We invite you to subscribe to our free weekly immigration newsletter to receive timely updates on this and related topics.  In the meantime, if you are considering filing a cap-subject H-1B petition as part of the FY2012 quota, please contact us.

Earlier this year, in March, the Mumbai Consulate suspend all H and L visa stamp processing due to aging infrastructure.   We are delighted to see that the Mumbai Consulate is now able to process H and L visa stamp applications on a regular basis.

Please see the Mumbai Consulate page for more information and details on scheduling an appointment.   Also, please do not hesitate to contact us if we can be of any assistance in preparing and filing H or L visa stamp applications at the Mumbai or other Consular sections.

Report Results and Recommendations

According to the audit report, an estimated 18% of H-1B workers analyzed in the relevant sample may have used their SSN for a purpose other than to work for the H-1B sponsor employer.   This includes 11% of H-1B workers who had posted wages from another an employer other than their H-1B sponsor employer.   This also includes 7% H-1B workers who had no posted wages from 2007 through 2009.

While we think that the audit is based on a very small sample (of 200) and while we believe (and the report acknowledges) that there may be some absolutely legitimate explanation for what the reports counts as unlawful employment, the numbers of possible irregularities is very high.   For example, the report acknowledges that some H-1B employees may be paid their H-1B wages abroad, or that some employees may have transferred their H-1B petition to a new employer (for example, by porting H-1B under AC21 and working upon filing of the H-1B paperwork, and not upon approval) which may not have been reflected in the data used in the audit report.

Conclusion

Notwithstanding these possible explanations for the high number of irregularities, the OIG makes the recommendation that DHS and SSA establish a data-matching protocol for identifying H-1B workers who are working for employers other than the H-1B sponsor employer or who are not working at all.    It is possible that, after such protocol is established, DHS would take a more proactive role in identifying and revoking H-1B petitions for workers who are not employed by the respective H-1B employer or to seek to identify H-1B workers who are in violation of their H-1B status by working for another (and non-H-1B sponsor) employer.

The OIG report highlights the need of proper H-1B compliance for both H-1B employers and employees.   Our office routinely advises H-1B employers on proper H-1B and I-9 compliance and H-1B employees on proper steps to maintain valid status — please do not hesitate to contact us if we can be of any assistance or if you have any questions or comments.

USCIS just released the information on the numbers of cap-subject FY2012 H-1Bs filed since April 1.   As of September 9, 2011, USCIS has received approximately 32,200 H-1B petitions counting toward the 65,000 cap (an increase of 3,200 over the previous two weeks).  Similarly, as of September 9, there were 16,700 H-1B visas filed subject to the U.S. Masters cap which has 20,000 limit (an increase of about 900 over the previous two weeks).

H-1B Quota Trends – Slow Rate of Filings; H-1B Caps Are Likely to Remain Open for Several Months

The numbers, as just reported for the past two weeks, confirm that the rate of filing of new cap-subject H1B filings is fairly slow, and remaining steady.  We have been noticing a weekly rate of filing of 1,000 to 1,500 in the regular H-1B cap and 500-700 in the US Masters H-1B cap.   Almost six months into this H-1B cap filing season, we can draw some (fairly) reliable conclusions on how long the cap would remain open: given the rate of filings for the past several weeks and since the H-1B cap opened, it is likely that the H-1B cap would remain open well into the rest of the year, and perhaps even well into 2012.

We invite you to subscribe to our free weekly immigration newsletter to receive timely updates on this and related topics.  In the meantime, if you are considering filing a cap-subject H-1B petition as part of the FY2012 quota, please contact us.

H-1B Quota Trends – Slow Rate of Filings; H-1B Caps Are Likely to Remain Open for Several Months

The numbers, as just reported for the past four weeks, show that the rate of filing of new cap-subject H1B filings is fairly slow, and remaining steady.  We have been noticing a weekly rate of filing of 1,000 to 1,500 in the regular H-1B cap and 500-700 in the US Masters H-1B cap.   Almost six months into this H-1B cap filing season, we can draw some (fairly) reliable conclusions on how long the cap would remain open: given the rate of filings for the past several weeks and since the H-1B cap opened, it is likely that the H-1B cap would remain open well into the rest of the year, and perhaps even well into 2012.

We invite you to subscribe to our free weekly immigration newsletter to receive timely updates on this and related topics.  In the meantime, if you are considering filing a cap-subject H-1B petition as part of the FY2012 quota, please contact us.

Background of the Need to Reprocess H-2B Prevailing Wage Determinations

Pursuant to a June 15, 2011 ruling, the U.S. District Court for the Eastern District of Pennsylvania ordered DOL  to reissue approximately 4,000 H-2B prevailing wage determinations in order to accurately reflect the new H-2B wage rates that will apply for H-2B employment beginning on or after September 30, 2011 (the new government fiscal year). The June 15, 2011 court order is related to an August 30, 2010 decision in CATA v. Solis, where the District Court ordered DOL to put in place new H-2B prevailing wage rules.

DOL Effectively Suspends Review of All Regular Prevailing Wage Requests by Shifting All Resources

As of a few days ago, DOL has confirmed that they have shifted all of its relevant Office of Foreign Labor Certification (OFLC) resources towards complying with the June 15 court order.   By making this decision, in effect, DOL has temporarily suspended the processing of all non-court mandated prevailing wage determinations.   While it is possible that DOL would switch some of its resources back to processing regular processing prevailing wage determinations, it is possible that no prevailing wage requests would be processed until DOL clears the H-2B backlog.

A federal rule dated as of August 1, 2011 states that DOL should be able to process all H-2B prevailing wages by October 1, 2011.  DOL has also indicated that they plan on completing all 4,000 H-2B prevailing wages by August 31, 2011.   As a result, we should expect (somewhat) normal processing of prevailing wage determinations to return during the month of September.

PERM and H-1B Filings to be Affected and Possibly Delayed

As a result of the prevailing wage suspension, many PERM and H-1B cases are put on an temporary, but highly undesirable, hold.   Even if DOL returns to normal prevailing wage processing as soon as September 1, there would be a significant backlog of pending regular prevailing wage requests.    Many foreign nationals must file their PERM/H-1B applications in order to be able to fit within AC21 guidelines, expiring recruitment of other urgent reasons.    We hope that DOL would be able to designate and allow some prevailing wages to be processed in order to allow foreign nationals with deadlines to make timely filings.

Additionally, and assuming that DOL returns to normal processing in September, there would be a high number of prevailing wage determinations issued which, in a few weeks or a couple of months, would result in a higher than normal volume of PERM filings.   As a result, we expect that PERM processing times to increase over the next 4-6 months.

We would continue monitoring this situation and provide updates as they become available.   Please feel free to subscribe to our weekly newsletter or contact us if our office can be of any assistance.

H-1B Quota Trends – Slow Rate of Filings; H-1B Caps Are Likely to Remain Open for Several Months

The numbers, as just reported for the past two weeks, show that the rate of filing of new cap-subject H1B filings is fairly slow, and remaining steady.  We have been noticing a weekly rate of filing of 1,000 to 1,500 in the regular H-1B cap and 500-700 in the US Masters H-1B cap.   More than four months into this H-1B cap filing season, we can draw some preliminary conclusions on how long the cap would remain open: given the rate of filings for the past several weeks and since the H-1B cap opened, it is likely that the H-1B cap would remain open well into the rest of the year, and perhaps even well into 2012.

We invite you to subscribe to our free weekly immigration newsletter to receive timely updates on this and related topics.  In the meantime, if you are considering filing a cap-subject H-1B petition as part of the FY2012 quota, please contact us.

The Problem Immigrant Entrepreneurs Face

A number of foreign national entrepreneurs face significant difficulties in obtaining permission to work and engage in the kind of entrepreneurship and job creation the economy needs.   Currently, the H-1B temporary work visa program is off-limits to many individual entrepreneurs, as a result of the January 8, 2010 Neufeld Memorandum which required each H-1B work visa petition to show that the petitioning employer has the right to control, including to hire and fire, the foreign national employee.   Most often entrepreneurs are the owners or have a controlling interest over a company, and the right to control in many cases cannot be shown.   Effectively, the Neufeld Memorandum prohibited H-1B self-sponsorship for foreign entrepreneurs.   For background, please see our prior articles relating to the Neufeld Memorandum.

Similarly, the permanent work visa program (or green card) limits the ability of foreign entrepreneurs to obtain benefits due to the lack of employer-employee relationship in many cases.    Other than the EB-5 category (see more below), in most cases, immigrant entrepreneurs must have a U.S. sponsor employer which can provide the employer-employee relationship, in a way discussed above.    Due to the fact that the EB-5 green card category requires an investment of $1 million, among other requirements, few foreign entrepreneurs qualify for it, at least at the initial stage of their endeavors.

Finally, the EB-5 category, as discussed above, has qualifying requirements and processing procedures which are not suitable for many small businesses.   The EB-5 category, in addition to having relatively high capital requirements, takes a long time.   Entrepreneurs who have the capital and decide to apply must go through several months of paperwork to find out whether their permanent residency visa is approved.   This uncertainty, and the possible inability to engage in employment in the U.S. during this time, make the EB-5 option difficult for many.

USCIS Clarifications:  H-1B Self-Sponsorship Possible With Specific Corporate Governance Structure

As a result of increased criticism and hoping to spur job creation and growth, USCIS has clarified the rules with respect to H-1B temporary work visas for the benefit of foreign entrepreneurs.   An H-1B petition would still have to show the employer-employee relationship between the sponsor entity and the entrepreneur; but in cases where the foreign entrepreneur is also an owner, USCIS has clarified that this can be done by structuring the company’s corporate governance in a way to allow a board (or similar entity) to exercise control over the entrepreneur (and employee).    For example, if there is a board of directors (or a committee of the board) which has the right to control (including to hire and fire) the entrepreneur-employee, then USCIS, under the new clarification, should deem that the right to control has been established.

USCIS has provided a “Frequently Asked Questions” document which seeks to provide additional information and answers to common questions.    It makes clear, however, that the Neufeld Memorandum remains unaffected.

USCIS Clarifications:  EB-2 NIW Self-Sponsorship Possible When Job Creation/Growth Can be Shown

Additionally, with respect to self-sponsored EB-2 National Interest Waiver (NIW) permanent visa category, the government has clarified that a foreign entrepreneur may qualify for a self-sponsored EB-2 NIW category if he/she can show that the business enterprise would benefit the national interest of the United States.

The EB-2 visa classification includes foreign workers with advanced degrees and individuals of exceptional ability in the arts, sciences, or business. Generally, an EB-2 visa petition requires a job offer and a Department of Labor certification. These requirements can be waived under existing law if the petitioner demonstrates that approval of the EB-2 visa petition would be in the national interest of the United States.

Prior to the current clarification, the EB-2 NIW category was used most often by professionals whose work can be shown to benefit the U.S. by providing a specific benefit or service.    Now, USCIS has clarified that job creation and economic growth, either direct or indirect, could be considered to be in the U.S. national interest and could allow foreign entrepreneurs to obtain permanent residency under the EB-2 NIW category.

USCIS has published a “Frequently Asked Questions” document on its website clarifying this new approach.  USCIS has indicated that they will complement these FAQs with internal training on the unique characteristics of entrepreneurial enterprises and startup companies.

Changes to Streamline the EB-5 Investor Green Card Program

The EB-5 immigrant investor program is also being further enhanced by transforming the intake and review process. In May, USCIS proposed a number of changes to streamline the EB-5 process which include: extending the availability of premium processing for certain EB-5 applications and petitions, implementing direct lines of communication between the applicants and USCIS, and providing applicants with the opportunity for an interview before a USCIS panel of experts to resolve outstanding issues in an application.   USCIS is developing a phased plan to roll out these enhancements and is poised to begin implementing the first of these enhancements within 30 days.   Hopefully, this would provide the kind of fast processing and additional certainty about the process many foreign investor entrepreneurs need.

Premium Processing to Expand to Include EB-1 Multinational Executives and Managers

Additionally, USCIS has announced that it intends to reinstate the premium processing option for EB-1 I-140 petitions filed on behalf of multinational executives and managers.    A processing time of 15 calendar days under the premium processing option would address a frequent concern by foreign managers and executives that it may simply take too long for them to be able to join a business operation in the U.S.  The USCIS announcement is unclear on the effective date of this change, but we will monitor the availability of this option and provide an update.

Conclusion

We welcome USCIS Director Mayorkas’s announcements and welcome the “clarifications” and changes he has just announced.   At the same time, we realize that these “clarifications” must be properly communicated to the field officers and adjudicators so that when a properly prepared self-sponsorship H-1B or EB-2 NIW petition is filed, it is given the due benefit under the new guidance.   Our office will be monitoring new developments on this topic and we would be providing relevant updates on our website and via our weekly newsletter.  In the meantime, please do not hesitate to consult us if we can be of any assistance.

H-1B Quota Trends – Slow Rate of Filings; H-1B Caps Are Likely to Remain Open for Several Months

The numbers, as just reported for the past three weeks, show that the rate of filing of new cap-subject H1B filings is fairly slow, and remaining steady.  We have been noticing a weekly rate of filing of 1,000 to 1,500 in the regular H-1B cap and 500-700 in the US Masters H-1B cap.   More than three months into this H-1B cap filing season, we can draw some preliminary conclusions on how long the cap would remain open: given the rate of filings for the past several weeks and since the H-1B cap opened, it is likely that the H-1B cap would remain open well into the rest of the year, and perhaps even well into 2012.

We invite you to subscribe to our free weekly immigration newsletter to receive timely updates on this and related topics.  In the meantime, if you are considering filing a cap-subject H-1B petition as part of the FY2012 quota, please contact us.

Reported Incidents of Refused H-1B Admissions

There is a lot of confusion on this subject, especially after reported incidents where Customs and Border Protection (CBP) agents have refused to admit H-1B workers attempting to enter the U.S. with a valid H-1B stamp (from a prior employer) and evidence of pending H-1B transfer petition.   Unfortunately, there are confirmed reports of CBP agents refusing to admit such H-1B workers in cases where the prior employer has withdrawn the H-1B petition (as the employer is required to do).

The Legal Framework

Pursuant to the relevant section of AC21 (§105) and as further discussed in the January 29, 2001 Pearson Memorandum, an H-1B beneficiary may be re-admitted to the United States in H-1B status to work for a different employer than the original petitioner if the alien possesses a valid, unexpired H-1B visa (unless exempt from the visa requirement), and if the alien can prove he or she was previously admitted in H-1B status and the alien’s current employer timely filed a new H-1B petition before the alien began work.

CBP Expected to Take Action to Ensure Uniform Application of the Legal Framework

During a recent AILA/CBP exchange, CBP has agreed that a former employer’s H-1B petition withdrawal should not impact a foreign national’s eligibility for AC21 H-1B portability based on a timely-filed H-1B petition by a new employer when the foreign national is seeking admission based on an H-1B visa issued pursuant to the prior employment.   CBP has further indicated that if the foreign national has an otherwise valid H-1B visa from the prior employment, and has evidence of a timely filed H-1B petition by a new employer (Form I-797 receipt or approval notice), the individual should be admitted on the basis of the old visa.

To ensure consistent application of these rules, CBP has agreed to send a reminder to their field offices that no new visa is required even though the prior petition has been withdrawn and revoked.

Conclusion

We are encouraged by CBP’s willingness to inform their field offices of the applicability of these regulations.   Despite this, it is possible that an H-1B worker may be denied admission by a CBP agent after misapplication of these regulations.    To complicate matters further, not all H-1B workers who have pending (or approved) H-1B transfer petition by a new employer and who seek to be admitted into the U.S. know whether their prior employer has withdrawn their H-1B petition.

As a result, a safer approach would be to for a H-1B worker seeking admission to the U.S. on H-1B status based on pending (or approved) H-1B transfer petition to be prepared to point to the relevant regulations discussed here and/or to ask to speak to a CBP supervisor at the point of entry and to explain that H-1B admission not be denied due to the fact that the prior employer’s H-1B petition has been revoked.

Our office also is happy to provide individual case consultations, which may include preparing a document package addressed to the CBP agents to explain the legal framework and to facilitate an H-1B worker’s admission into the U.S.   Please contact us if our office can be of any assistance.

Similarly, as of April 8, there were 4,500 H-1B visas filed subject to the U.S. Masters cap (which has 20,000 limit).  This means that as of April 8, there are approximately 15,500 visas left under the U.S. Masters H-1B cap.

Comparison to the Last H-1B Season (FY2011)

Our office keeps detailed statistics of the previous H-1B filing seasons, and we are able to make comparisons with prior H-1B years in an effort to estimate demand and when the H-1B caps may be reached.  While it is too early to provide an estimate of when the H-1B cap would be reached for this fiscal year, all indications are that the cap would remain open for at least 6-8 months.

Last year, during the FY2011 H-1B filing season, by April 8th, there were $13,500 regular cap H-1B petitions filed.   This is almost three times as much as this year’s April 8 indicator.    Also, last year’s April 8th count of Master’s H-1B cap filing was 5,600, compared to this year’s count of 4,500.   Based on this information, and assuming there is no dramatic increase in the rate of economic recovery, we anticipate that this year’s H-1B season would extend for at least 6-8 months.

H-1B Quota Trends

Throughout every H-1B cap filing season, we provide timely updates on the H-1B numbers and we draw predictions and conclusions based on the numbers and our experience.  So early in the process for this year, it is impossible to draw any trends; however, stay tuned for more numbers and updated trends over the next days and weeks.  You may want to subscribe to our free weekly immigration newsletter to receive timely updates on this and related topics.

In the meantime, if you are considering filing a cap-subject H-1B petition as part of the FY2012 quota, please contact us as soon as possible — it is never too early to file a cap-subject H-1B petition.

As it appears as of the time of this article, the U.S. federal government is likely to shut down, we would like to provide some information as to how the shutdown would affect the immigration cases pending or to be filed shortly.   Our office has been receiving an increasing number of inquiries from alarmed clients as to what would happen should the federal government close on Monday if a deal is not reached on the federal government’s budget.   (See latest Google News)

How Would a Government Shutdown Affect Immigration Cases?

There is no simple answer to this question, as some federal government agencies would continue to operate, some would close partially and some would close almost completely.  Since the last time this kind of shutdown happened was 15 years ago, there are no clear rules and guidance as to what would remain open and what would close.  With respect to immigration, it appears that there would be some disruptions to pending cases and upcoming filings.   Generally, the government is likely to stop all non-essential, all non-self-funded and all non-contractually funded services.

USCIS Cases

Since USCIS is funded primarily through application fees, it is expected that most of its services and centers would operate normally, perhaps with slightly diminished staff.  Because USCIS is a government agency which relies on other government agencies to perform its services, there may be certain disruptions; however, overall, case processing at USCIS is expected to resume.   Border processing of immigrants and border enforcement activities would continue as they are deemed “essential.”

Department of State – No (or Slow) Visa Applications; Visa Bulletin Uncertain; NVC Processing Could Continue

The Department of State (DOS) is expected to to cease non-emergency visa services and non-US citizen services at U.S. Consular Posts abroad.  As a result, no new visas are expected to be issued and visa application interviews are likely to be cancelled (or postponed).   U.S. passport applications will not be accepted and processing of submitted applications is likely to be put on hold.

As a comparison, according to data from the Congressional Research Service Report, during the last shutdown in 1995,  approximately 20,000 – 30,000 visas went unprocessed each day and 200,000 applications for U.S. passports went unprocessed.

It is unknown at this point, however, whether the May 2011 Visa Bulletin, which is expected to be issued over the next few days and which is issued by the Department of State, will be affected.   We hope that it would be released before Monday when a possible shutdown would take effect.   Many of our readers are eagerly expecting the May 2011 Visa Bulletin because it is expected to bring some substantial forward movement to the EB-2 India category.

With respect to immigrant visa (family, employment, etc.) cases pending at the National Visa Center (NVC), it is possible that they would continue to be processed as NVC’s staffing funding was under contract.

Department of Labor – LCA, PERM and Audits

It is unclear exactly how the Department of Labor would be affected.   We expect that ETA Form 9035 LCA filings, used most often in connection with H-1B filings, to be affected.  This may mean that no new LCAs can be filed (and those filed may be put on hold) and, as a result, new H-1B filings can be delayed.

ETA Form 9089 PERM labor certifications are expected to be similarly affected.  It is unclear whether the system allowing new PERM labor certification filings would be shut down; however, we expect that processing of PERM labor certification cases to stop during a shutdown.  This holds true for processing of PERM audits and appeals at the BALCA.

Conclusion

While the full extent of the federal government shutdown (if it were to happen over the next day or two) is unknown; we can anticipate some disruptions to government services affecting immigrants.  Perhaps more severe would be the disruptions to visa applications at U.S. Consular Posts abroad, followed by delays or inability to file H-1B and/or PERM labor certifications.   While some of these affected cases would be able to withstand delay, there would be a number of urgent visa or petition cases which would need to be filed or processed.   The shutdown would also create a significant increase in the processing time backlogs for almost all immigration cases.

We stand ready to help analyze any cases which are time-sensitive and may suffer severe negative impact by the shutdown.  Please feel free to contact us.   Our office would also continue to monitor developments and provide timely updates.  Please feel free to subscribe to our free weekly newsletter to obtain developments on this and related topics.

The H-1B Quota and Expectations for This Year

When the H-1B visa category was created in 1990, Congress imposed an annual cap on the number of new H-1B visas which can be issued.  Although the cap has varied through the years, it is set to 65,000 per year plus 20,000 for graduates of U.S. masters programs for the new fiscal year (FY2012) starting on October 1, 2011.

As discussed above, the H-1B cap “opens” on April 1, 2011 and will remain open for new H-1B filings until the 65,000 H-1B limit is reached.  While it is impossible to predict exactly when the FY2012 H-1B cap will be reached, it is helpful to provide some context.  For FY2009, filing made on or after April 1, 2008, caused the H-1B cap to be reached in eight (8) days.   For the FY2010, the H-1B cap was open between April 1, 2009 and December 22, 2009 and for last year, FY2011, the H-1B cap was open between April 1, 2010 and January 25, 2011.

Conclusion

As a result, and due to the slow economic recovery, while we expect a robust H-1B filing season this spring, we anticipate that H-1B visa demand would be similar to last year when the H-1B cap was open for eight months.   Throughout the H-1B season, and as early as mid-April, we will be providing updates on the number of H-1B cap filings and will be revising (hopefully by making them more accurate) our estimates of how long the H-1B cap would last.  To ensure you receive these updates, please sign up to our free weekly newsletter.  If you wish to start a new H-1B work visa petition under this year’s quota, or if our office can be of any help, please contact us.

As a result, the consulate would not accept new H or L visa stamp application appointments.  H and L visa stamp applicants are urged to schedule appointments at the other U.S. consulates in India.  Appointments can be scheduled through VFS.  Note: H and L appointments which are already scheduled would be honored and processed.

Proposed Rule Published Today, March 3, With a 60-day Comment Period

Today USCIS published a proposed rule which describes the pre-registration process in more details and establishes the procedures for pre-registration, selection and actual H-1B petition filing.   The rule has a 60-day comment period during which the public can provide comments to USCIS with respect to the new regulations.  Our office plans to do so as there are some provisions which substantially alter the process to our clients’ disadvantage.

The Proposed H-1B Pre-Registration System

The proposed rule would require employers who wish to file for a cap-subject H-1B petition to submit a simple electronic registration for each H-1B case the employer wants to file.  The electronic submission would open in early March and for each H-1B petition would require (1) the employer’s name, employer identification number (FEIN), and employer’s mailing address; (2) the authorized representative’s name, job title, and contact information (telephone number and email address); and (3) the beneficiary’s full name, date of birth, country of birth, country of citizenship, gender and passport number.

Once USCIS receives a number of pre-registrations over a certain period of time, they would evaluate the H-1B visa demand and if the demand exceeds the available 65,000 plus 20,000 visa numbers, they would run a random lottery to determine which of the pre-registrations would be allowed to submit a full H-1B petition.  Those selected would be notified electronically and would be allowed to print a selection confirmation page which would then be included with the H-1B petition.

Upon selection in the H-1B cap, an employer would have 60 days from the date of notification to submit the actual full H-1B petition for the beneficiary named, including the applicable Labor Condition Application (LCA).  H-1B petitions which are selected but are filed after the 60-day filing deadline would be rejected.

If the demand is lower than the available H-1B visas, the pre-registration system would continue to accept new pre-registration submissions until the H-1B cap is reached.   USCIS contemplates creating a waitlist system to handle pre-registrations which are not selected initially, but may be selected at a later time should the number of allocated H-1B pre-registrations exceeds the actual H-1B petitions filed and accepted for processing.

USCIS’s Rationale of H-1B Cap Filing Pre-Registration

The new proposed Internet-based registration system allows employers to complete a much shorter and less expensive registration process for consideration of available H-1B cap numbers.  The new system will also relieve a significant administrative burden and expense from USCIS.   This proposed rule is estimated to reduce costs for H-1B employers, or at least eliminate waste associated with filing of H-1B petitions which may be subsequently rejected due to reaching of the H-1B cap.    USCIS is also estimated to realize cost-savings from this process.

Important Note: Published Rule is Not Final; This Year’s H-1B Cap Filing Season Is Not Affected

It is very important to stress that this is only a proposed rule which is subject to a 60-day comment period and further USCIS revisions.   This year’s H-1B cap season is not affected by this rule and it would continue under the current system where all H-1B cap filings are filed in their entirety on or after April 1st, without any pre-registration requirements.

This is an important development in the H-1B cap filing season and we will continue monitoring the proposed rule throughout and after the 60-day comment period.   Please feel free to subscribe to our weekly newsletter to obtain timely updates on this and related issues.  Also,  feel free to contact us with any questions, comments or if our office can be of help.

About the H-1B Program and the Annual Cap

The H-1B visa category was created in 1990 through the Nationality and Immigration Act of 1990 (INA).  Upon the creation of the H-1B visa type,  INA imposed a numerical limitation (“cap”) on the number of H-1Bs that could be issued in each fiscal year.  This “cap” (or quota) has varied over the past years but is set to 65,000 per year for FY2012 starting on October 1, 2011.

H-1B is a nonimmigrant visa classification used by U.S. employers to hire a foreign national who will be employed temporarily in the U.S. in a specialty occupation (generally one which requires a bachelor’s degree or higher) or as a fashion model.  Each year, by law, USCIS can approve up to new 65,000 H-1Bs, thereby allowing many private and employers to hire temporary qualified workers.   H-1B non-immigrants who work at (but not necessarily for) universities and non-profit research facilities are excluded from the numerical cap (see below for discussion of cap-exempt employers).

There are certain exceptions to the congressionally-mandated maximum of 65,000 H-1B visas per fiscal year.  The first 20,000 H1B visas issued to alien workers who obtained their master’s degree from a U.S. university are exempt from the 65,000 cap;  H1B visas issued to such U.S. master degree holders subsequent to the first 20,000 are then counted against the overall 65,000 cap.    Additionally, the cap does not apply to foreign nationals in the U.S. who are in lawful H1B status and who are seeking to extend their visa or change employers.

Timing of the Cap-subject H-1B Petition Filing

The earliest date on which cap-subject H-1B petitions to be counted under the FY2012 H-1B cap is April 1, 2011.  By law, the earliest starting employment date for petitions approved under the FY2012 H-1B cap is October 1, 2011.  As a result of this up to 6-month window  between the time of filing and the time of employment, it becomes important to plan properly with respect to resources, valid status in the U.S. and work authorization.

Before an H-1B petition can be filed on or after April 1, there are a number of lead-time items.   Employers who have not submitted Labor Condition Applications (LCAs) with the Department of Labor’s iCERT system must have their Federal Employer Identification Number (FEIN) verified – a process which generally takes 2-4 business days.  Subsequently, an LCA must be filed for the offered position.  LCAS tend to be certified within 7 business days.   Only after the LCA is certified (with very minor exceptions) can an H-1B petition can be finalized and filed.  Accordingly, it becomes important to start the H-1B petition process as early as possible.  At a very minimum, an H-1B petition preparation can take at least two (2) and often at least three (3) weeks.

Cap-exempt Employers Can File H-1B at Any Time

Not all H-1B petitions must be filed under the H-1B annual cap.  Certain employers can file for H-1B workers at any time of the year and without being subject to the numerical H-1B visa limitations.  Such employers are generally qualified institutions of higher education (universities, colleges) and non-profit research organizations, or non-profits affiliated with institutions of higher education.   Note, not all non-profit organizations qualify; only those who are engaged in research may file for cap-exempt H-1B petitions.

Please see our helpful Guide to H-1B Cap Exempt Employers for more details.

Projections About This Year’s H-1B Cap

As discussed above, the H-1B cap “opens” on April 1, 2011 and will remain open for new H-1B filings until the 65,000 H-1B limit is reached.  While it is impossible to predict exactly when the FY2012 H-1B cap will be reached, it is helpful to provide some context.  For FY2009, filing made on or after April 1, 2008, caused the H-1B cap to be reached in eight (8) days.   For the FY2010, the H-1B cap was open between April 1, 2009 and December 22, 2009 and for last year, FY2011, the H-1B cap was open between April 1, 2010 and January 25, 2011.

Due to the recovering economy, we do not expect that this year’s H-1B cap will be reached in eight days.  However, we do not anticipate that the H-1B cap will remain open until January of 2012.  Accordingly, to eliminate uncertainty, we recommend to our clients to aim for an early April H-1B filing.

Throughout the H-1B filing season, we provide weekly (or more often, if necessary) updates about the status of the H-1B cap and any related developments.  Please check back often or subscribe to our Weekly Newsletter to receive news and updates related to the H-1B filing season.

Conclusion

Because USCIS received more applications than there were visas available for fiscal years 2009, 2008, 2007 and 2006 within a few days of the cap opening, and for the 2011 fiscal year the cap was hit in January 2011 , we recommend that clients consider their needs as soon as possible and be prepared to file on the first available date – April 1, 2011.    Our attorneys and professionals stand ready to review your case, as part of our free initial consultation, and will help you prepare a strong H-1B application.

Comparison of 2009 and 2010 H-1B Cap Seasons

This H-1B cap season lasted a month longer than last year’s.  The fiscal year 2010 (FY2010) H-1B cap season lasted until late December 2009, when the H-1B quota was reached.  This year, FY2011, the H-1B cap season lasted a month longer.  This can be explained in a number of ways, most notably due to the recession and the slower rate of new hiring.   While the rate of H-1B filings over the past few weeks of this H-1B cap season remained relatively steady, we expect that as the economy improves over the next couple of quarters, the H-1B demand should pick up and we expect that the new H-1B cap season, to open on April 1, 2011, to be busier than the last one.

Alternatives to H-1B Cap

Now that the H-1B quota has been reached, we are receiving an increasing number of inquiries by both cap-subject employers and prospective employees about the alternatives for work authorization between now and October 1, 2011, when the new fiscal year’s H-1B quota would begin (as a reminder, April 1, 2011 is the earliest a cap-subject H-1B application can be filed).  We describe some of the most common H-1B visa alternatives.  Note that the list is not intended to exhaust all possible visa types and scenarios pursuant to which an employee may be legally employed.  Our goal is to list some of the common options for the benefit of our clients and readers.  We are happy to discuss individual cases as part of our FREE initial consultation.

Cap-Exempt H-1B

A number of employers may qualify to be cap-exempt and are allowed to file for H-1B petition at any time.   A cap-exempt employer is (1) an institution of higher education, (2) related or affiliated to a higher education institution nonprofit entity, or  (3) nonprofit research organization or a governmental research organization.  Please see our cap-exempt H-1B employer guide.   As a result, many educational institutions, non-profit and research organizations may qualify to file cap-exempt H-1Bs.   We are happy to help evaluate whether an employer can qualify to be cap-exempt.

O-1 or P-1 Extraordinary Ability Visas

O-1 and P-1 visas are generally reserved for individuals who have extraordinary ability in the sciences, arts (including the television and motion picture industry), education, business, or athletics.  By definition, not many individuals qualify for one or both of these visa types, but where possible, an application for O-1 and/or P-1 should be prepared in lieu of H-1B.   In addition to being able to obtain work authorization pursuant to these visa types, an O-1 and/or P-1 approval may establish the basis for the subsequent application for an EB-1 category permanent residency.  Please contact us if you would like our help in evaluating your O-1 and/or P-1 visa case.

L-1 Intracompany Transferree

The L-1 visa type allows multinational companies who have presence abroad to transfer their employees from their overseas offices to their U.S. office (or to establish a new U.S. office).  This visa type is a good option for foreign employers seeking to establish or boost their U.S. presence and for foreign nationals currently employed abroad.   Foreign nationals who are currently in the U.S. generally will not qualify for L-1 visa.  An added benefit to the L-1 visa is that family members are entitled to a work authorization pursuant to L-2 status.

E-1/E-2 Treaty Trader or Investor

The E-1/E-2 visas allow nationals of countries with which the U.S. has trade treaties to invest an amount in the U.S. and receive an E-1 (treaty trader) or E-2 (treaty investor) visa.  See a list of treaty countries.

The E-1 treaty trader visa is suitable if the foreign national has a multinational employer who is willing to transfer them, and the company has significant trade between the foreign country and the U.S.  The employee must also have skills which are essential to the operation of the company trade.   Dependents of E-1 visa holder are eligible for work in the U.S.

The E-2 treaty investor allows foreign nationals to invest (preferably) a substantial amount in the U.S. and obtain an E-2 visa to be able to manage and direct their investment.  The amount required for investment generally varies depending on the industry (the so called, proportionality test) with more capital-intensive industries requiring more significant investment for E-2 application.   Dependents of E-2 visa holders are eligible to apply for work authorization.

H-1B Program Changes by Congress Unlikely

While we do not expect Congress to raise the H-1B cap for FY2011, it is nonetheless possible.  There are a number of proposals currently circulating in Congress, some of which aim to increase the H-1B cap.  While none of these proposals have gained momentum at this time, we will be providing updates as soon as there is a likelihood that there will be development on this front.

Wait and File on April 1, 2011 for the FY2011 Cap

For some of our clients, waiting until April 1, 2011 to file a new cap-subject H-1B petition may be the best option.  The H-1B visa type, although subject to some requirements, is a fairly common visa type for which many qualified employees are eligible.    As of now, the FY2012 H-1B cap is expected to be the same as it was for the FY2011 fiscal year – 65,000 H-1B visas (plus 20,000 for holders of U.S. master’s degrees).  However, as the economy starts to improve and employers increase hiring, we do not expect that next year’s H-1B numbers will remain available for as much as 9 months, as they did in 2010.   Accordingly, we urge employees and employers to prepare and file most or all of their H-1B petitions on or about April 1, 2011, to ensure that their petition has the greatest chance to be included in the quota.  Please contact us to start preparing for your FY2012 H-1B cap filing.

The conclusion of the report is that certain reforms are needed for the H-1B program in order to minimize the risks and costs of the current program.    The main conclusions of the report are as follows.

Most interviewed companies said the H-1B cap and program created costs, but were not factors in their decisions to move R&D overseas.   GAO reports that employers generally indicate that the H-1B program and the cap adds additional costs; however, most large companies, if faced with H-1B cap shortage, find ways to employ talented foreign workers in the U.S., albeit at a higher cost.   On the other hand, small firms were more likely to fill their positions with different candidates, which they said resulted in delays and sometimes economic losses, particularly for firms in rapidly changing technology fields. Interviewed employers also cited costs due to the H-1B lottery process employed when the cap is reached—noting that it does not allow them to prioritize their candidates if they have submitted more than one petition or to make timely hires in response to business needs.

Agency data and systems hinder tracking the cap and H-1B workers over time. The total number of H-1B workers in the U.S. at any one time—and information about the length of their stay—is unknown, because (1) data systems among the various agencies that process such individuals are not linked so individuals cannot be readily tracked, and (2) H-1B workers are not assigned a unique identifier that would allow for tracking them over time—particularly if and when their visa status changes. Although information on the total H-1B workforce is lacking, data on approved petitions show that, since 2000, most people that were approved to be H-1B workers were born in China or India, were hired for technology positions, and increasingly held advanced degrees. System limitations also hinder the Department of Homeland Security from knowing precisely when and whether the annual cap has been reached each year, although this problem might be remedied through the agency’s data-modernization plan. Finally, data limitations, along with complex economic relationships, hinder our ability to estimate the potential impact raising the cap would have on U.S. worker wages and employment.

Staffing (Consulting) Companies Model and Employ of H-1B Workers Weakens Protections for U.S. Workers.   Elements of the H-1B program that could serve as worker protections—such as the requirement to pay prevailing wages, the visa’s temporary status, and the cap itself—are weakened by several factors. First, program oversight is fragmented and restricted. For example, the Department of Labor’s review of H-1B applications from employers is cursory and limited by law to only looking for missing information and obvious inaccuracies. Yet a recent Department of Homeland Security study reported that 21 percent of the H-1B petitions they examined involved fraud or technical violations.

Second, the H-1B program lacks a legal provision for holding employers accountable to program requirements when they obtain H-1B workers through a staffing company (see fig. 2). Officials from the Department of Labor’s investigative office reported receiving the bulk of their complaints from H-1B workers contracted by staffing companies.

Third, statutory changes made to the H-1B program have, in combination and in effect, increased the pool of H-1B workers beyond the cap and lowered the bar for eligibility. Specifically, these changes have increased the available exemptions to the cap; offered unlimited extensions on the visa while holders apply for permanent residency; and broadened the job and skill categories for eligibility. Regarding the latter, over 50 percent of employers requesting H-1B workers between June 2009 and July 2010 categorized their prospective H-1B workers as receiving entry-level wages, although we cannot tell whether this trend reflects lower skill levels or other factors.

Conclusion.   The GAO report concludes that the H-1B program, as currently structured, may not be used to its full potential and may be detrimental in some cases. Although executive agencies overseeing the program can take steps to improve tracking, administration, and enforcement, the data presented in the GAO raises important questions, including the adequacy of the qualifications of foreign workers the U.S. admits through the program, the appropriateness of H-1B hiring by staffing companies, and the role of the program with respect to permanent residency.