On April 1, 2013, U.S. Citizenship and Immigration Services (USCIS) will begin accepting H-1B petitions from U.S. employers seeking to hire foreign workers. The H-1B is the principal non-immigrant visa for employers to sponsor foreign workers in professional occupations. By statute, only 65,000 new H-1Bs are available annually, with an additional 20,000 set aside for workers holding U.S. advanced degrees, such as a master’s or PhD. With the American economy recovering after the recent recession, USCIS predicts that this year, the H-1B cap could be reached in the first few days of the filing season. This resurgence in H-1B demand means that more than ever, employers need to know what the H-1B cap is. And it means that America needs comprehensive reform to alter the cap to reflect our economic reality.
The H-1B is a popular visa category that employers use to temporarily employ foreign workers in the United States. There are two conditions to qualify for the visa. First, the job must be in a specialty occupation, which is defined by regulation and requires at least a bachelor’s degree in a field that is related to the occupation. Second, the foreign worker must qualify for that job by possessing a bachelor’s degree or its equivalent in that field. The H-1B petition process begins with the filing of a Labor Condition Application (LCA) with the Department of Labor. In the LCA, the employer must attest that the foreign worker will be paid the greater of the local prevailing wage or the actual wage rate (the rate paid by the employer to all other individuals with similar experience and qualifications for the specific employment in question), among other attestations. The H-1B quota has remained largely unchanged since 1990. During periods of economic boom, the standard cap was raised to 115,000 for FY 1999 and 2000, and 195,000 for FY 2001, 2002 and 2003. The standard cap reverted back to 65,000 for FY 2004, where it has stayed ever since.
Not every H-1B worker is subject to the cap. An H-1B worker is exempt if he or she will work at an institution of higher education or related or affiliated nonprofit entity, nonprofit research organization or governmental research organization. Also exempt are applications to extend an H-1B worker’s stay in the United States, applications to change employers, and amendment petitions to notify USCIS of changes in the terms of employment. An H-1B petition to permit the worker to work concurrently in a second H-1B position is also exempt. Finally, if the foreign worker previously held H-1B status in the United States for less than six years, he or she can be sponsored to resume H-1B status to finish out the six years without being subject to the cap.
By law, employers may file their H-1B petitions no more than six months before the following government fiscal year, which begins October 1 – but in practice, employers have to file on April 1. In years when H-1B demand is high, employers lose their chance to obtain an H-1B if they do not move quickly. As recently as the filing season for FY 2008, the cap was reached on the very first day of filing, with USCIS receiving approximately 150,000 cap-subject petitions that day. A look at FY 2012 and 2013 also shows a trend toward a short H-1B cap season this year, with the cap reached in November 2011 for FY 2012 and in June 2012 for FY 2013. Since 2005, USCIS has used a lottery system when it receives more than 85,000 petitions during the first five business days of the filing season. The lottery treats equally all petitions received in those five days, with a computer randomly choosing the cases that USCIS will process to completion. If the advanced degree cap is reached, USCIS routes the remaining petitions to the standard pool. The last lottery was conducted in 2008. Not only is USCIS anticipating a lottery this April as well, but the agency is also postponing the start of its H-1B expedited processing service (for which anxious employers are willing to pay a hefty fee) until April 15 to allow the agency time to complete data entry for these expedited cases.
Members of Congress are currently working on proposals that could impact the H-1B program. The “Gang of 8,” a bipartisan group of Senators, is hammering out a comprehensive immigration bill that could contain, among other components, a provision doubling the H-1B cap to 130,000. As of this writing, the Gang of 8 is nearing agreement on the bill, but negotiations remain confidential. Another recent proposal, the Immigration Innovation Act of 2013 (S. 169), also known as the “I-Squared Act,” would also raise the H-1B cap. Additionally, it would remove the cap for advanced degree holders.
The H-1B visa program is a lightning rod in the immigration debate. Everyone acknowledges that the United States needs more skilled workers, but there is tension between critics and supporters about whether the H-1B program hurts or helps U.S. workers. Critics in Congress argue that the program undercuts U.S. workers and allows employers to pay foreign workers lower wages, and labor unions and other groups are joining the cause. So while we may ultimately see a higher H-1B cap, the rise will likely come at the cost of more impediments, such as increased filing fees.
America has always demanded, and rightfully so, the highest-skilled and most talented workers in the world. The current H-1B cap is outdated, and it only serves to impede U.S. employers in their efforts to hire these workers. Until the cap is lifted to a more sensible level, employers, H-1B professionals, and America will continue to be shortchanged.
Michael D. Patrick is a Partner at Fragomen, Del Rey, Bernsen & Loewy, LLP, resident in its New York office. He may be contacted via email at email@example.com. Linda Attreed, a Law Clerk, and Nancy Morowitz, Counsel at the firm, assisted in the preparation of this column. To learn more about Fragomen, please visit http://www.fragomen.com.