With the coming of the New Year also comes the beginning of a new H-1B filing season.  The H-1B visa program is the primary method United States companies use to hire foreign nationals in IT, engineering, and business professions.  H-1B visas are subject to a strict quota which does not meet the current demand.  The filing period for those limited number of H-1B visas begins on April 1.

Being ready for the April 1 H-1B filing deadline can be logistically tricky for many employers and HR departments.   Below is some guidance regarding the H-1B program and tips for making sure the H-1B filing process goes smoothly for employers and their new hires.

About the H-1B program

The H-1B program allows United States employers to hire foreign nationals to work in specialty occupations. A specialty occupation requires theoretical and practical application of a body of highly specialized knowledge. It also requires at least a bachelor’s degree or higher in the specific specialty as a minimum for entry into the occupation.

An H-1B beneficiary may work for a United States employer temporarily for a period of up to six years.  H-1B status is issued for an initial period of three years.  H-1B status may be extended for an additional three years.  H-1B status may be extended beyond the six year maximum under limited circumstances when the H-1B holder has a pending application for employment based lawful permanent resident status.

H-1B Quota: Cap Subject and Cap Exempt Positions

An annual quota between 58,200 and 65,000 H-1B visas is available each fiscal year. An additional quota 20,000 H-1B visas is also set aside for individuals who graduate with master’s degrees or higher from United States institutions of higher learning. The H-1B cap applies only to new workers, not those already on H-1B status.

Certain occupations are not subject to the annual numerical limitations on H-1B numbers. These occupations include:

  • J-1 physicians who have obtained a waiver under the Conrad 30 program
  • Employees at institutions of higher education or related or affiliated nonprofit entities, or non-profit research organizations, or governmental research organizations

Filing Timelines for Cap Subject Petitions

Cap subject H-1B visas are subject to strict filing timelines.  The annual quota of H-1B visa numbers are released on the first day of each new government fiscal year, which is October 1st.  Employers seeking to hire foreign nationals under the H-1B program may begin filing applications for the upcoming fiscal year on April 1st of preceding fiscal year.  For instance, employers seeking to hire H-1B employees starting work on October 1, 2015 (fiscal year 2016 or FY2016) may begin filing applications on April 1, 2015.

When the Quota is Met: Random Selection of H-1B Petitions

The annual H-1B quota was reached within the first week of the H-1B filing period in April 2014.  It is expected that the H-1B quota will be reached within the first few days of filing in April 2015, as well.

When the number of H-1B petitions received during the first week of filing reaches or exceeds the H-1B quota, United States Citizenship and Immigration Services (USCIS), the agency responsible for conferring immigration benefits, selects petitions for processing by lottery.  Petitions received within the first week of filing are eligible for random selection.  Petitions received after the first week of filing and those not selected for processing are returned to the petitioner.  This means that a petition received on April 1 is not guaranteed to be selected for processing even if received before other petitions.

Options When the H-1B Petition is not Selected for Processing

In 2014, USCIS received approximately 172,500 H-1B petitions which were subject to the H-1B lottery. This means the odds for selection were roughly 50%. The odds were slightly higher for individuals falling under the master’s degree quota (Master’s Cap).  It is predicted that USCIS will receive even more H-1B petitions in April 2015, reducing the odds of selection even further.

There are a few options available for employers whose H-1B petitions were not selected for processing.

17 Month STEM OPT Extension

Many employers filing H-1B petitions are seeking to sponsor foreign nationals who are recent graduates of United States universities and are working for the employer under the OPT program.  International students who attend United States universities on F-1 status are entitled to a 12 month period of post completion Optional Practical Training (OPT). OPT allows international students to gain practical training through work in an area directly related to the field of study.

Students who graduate with degrees in science, technology, engineering, and mathematics (STEM) may be eligible for an additional 17 month extension of OPT.  There are four requirements to qualify for the OPT STEM extension.

First the student must have graduated with a degree listed on the SEVIS STEM Designated Degree Program List maintained by Immigration and Customs Enforcement (ICE).  Not every STEM related degree is on the list and there are some notable degrees excluded.

Second, the employer must be enrolled in the E-Verify program.  The E-Verify program is an Internet-based system operated by the Department of Homeland Security (DHS) in partnership with the Social Security Administration (SSA) available for employers to validate the employment eligibility of new hires.  While adoption of the system was once seen as burdensome, use of E-Verify is becoming a necessity.  Federal contracting regulations mandate use of E-Verify.  Many states and municipalities are also requiring use of E-Verify.  Many service agreements are also requiring use of E-Verify in order to comply with governmental requirements.  The trend will be for wholesale adoption of the E-Verify program nationwide.  Employers should give careful consideration as to whether they wish to adopt E-Verify.  Implementation of E-Verify can take up to two months, so employers who are not currently enrolled may wish to start registration three months before student’s OPT periods are set to expire.

Third, the student must currently be in an approved post-completion OPT period in order to apply for the 17 month STEM extension.  Fourth, the student must apply before the period of post-completion OPT expires.

Alternative Immigration Categories

Employers might also consider alternative immigration categories to hire foreign nationals whose H-1B petitions were not selected for processing.  Employees working for foreign affiliated companies for at least one year might be eligible for the L-1 intracompany transfer category.  Certain employees of extraordinary ability might be eligible for the O-1 nonimmigrant category.  Sponsorship for lawful permanent resident status may also be a suitable alternative to waiting for the next H-1B cycle.

Offshoring of Workers

Many technology related occupations allow employees to work remotely.  For those occupations, an option for workers not selected for H-1B processing may be to establish offshore operations through branches or affiliates in Canada, Mexico, or the Caribbean.  Workers can perform their job duties remotely and travel periodically to the United States to attend business meetings utilizing a visitor visa.

President’s Executive Actions on Immigration and OPT

As a part of President Obama’s November 20, 2014 executive orders on immigration, the President announced reforms to the OPT program, which may include expansion of the period OPT.  These reforms may increase the number of opportunities available for employers to sponsor valuable H-1B candidates.

Legislative Reform

The President’s announcements offer only a stop gap to the problems facing employers until legislation is passed improving the business immigration system.  On January 13, 2015, Senator Orin Hatch proposed the Immigration Innovation Act of 2015 (S. 153) which offers an increase in the number of H-1B visas to 115,000, allows increase up to 195,000 visas depending on market conditions, and removes the H-1B cap for Master’s Cap candidates.  The bill offers a number of reforms to reduce the employment based lawful permanent resident backlog as well.  The bill is supported by the U.S. Chamber of Commerce.  Employers interested in business immigration reform should indicate their support for the bill to their Congressional representatives.

Tips for the H-1B Season

1.     Start Early

Employers should start the preparations for filing H-1B petitions early.  Problems outside of the employer’s control are inevitable.  In 2014, weather delayed Federal Express delivery of H-1B petitions by several days.  The Department of Labor’s Labor Certification Application (LCA) system will go offline.  LCA processing times will exceed seven days.   February is a good time to collect documents, prepare Labor Condition Applications, and have petitions ready for execution.

2.     Gather Requested Documentation

There has been a trend towards stricter adjudication of H-1B and other immigration petitions.  Providing the proper documentation to your lawyer and USCIS will improve the likelihood of initial approval, will allow for faster adjudication, will reduce issuance of Requests for Evidence, and will likely reduce the overall cost of the process to the employer.

H-1B candidates should have their resumes updated and diploma and transcripts available.  If the H-1B candidate was educated outside the United States or is seeking to show experience in lieu of education, educational evaluations should be obtained well in advance of April 1.  All non-English language documents must include certified translations.

Small employers should be prepared to provide promotional materials and financial documentation demonstrating that there is a viable business that can support the H-1B employee’s salary.  Employers seeking H-1B visas for consultants or offsite workers should have service agreements and project timelines available.  Itineraries should be prepared for workers who will be on multiple job sites.

3.     FEIN Confirmation Information

Companies which have not filed an immigration petition within the last five years should have documentation available confirming the company’s Federal Employment Identification Number (FEIN).  The Department of Labor cross references all LCAs with the IRS system.  If the FEIN is not found in the database, the Department of Labor will request IRS documentation from the employer confirming the FEIN.  The employer must provide IRS issued documentation confirming the FEIN such as the FEIN confirmation letter.  Request for FEIN confirmation can delay adjudication of the LCA by 7 days, increasing LCA processing time to 14 days or more.  Contact your accountant or records keeper now and provide your attorney with a FEIN confirmation document to avoid preparation delays.

4.     Current Dun & Bradstreet Information

USCIS utilizes a system call VIBE (Validation Instrument for Business Enterprise) to validate company information and detect fraud. The VIBE program uses Dun & Bradstreet databases to confirm company information.  The absence or mismatch of company information in the VIBE system may result in the issuance of a Notice of Intent to Deny the petition.  Small companies or newer companies may not have current Dun & Bradstreet profiles.  You may update your Dun & Bradstreet profile for purposes of the VIBE system by accessing http://fedgov.dnb.com/webform .

5.     Have Your Filing Fees Ready

The filing fees for new H-1B petitions are $1575 or $2325 depending on the size of the sponsoring employer.  The checks for those filing fees must be included with the H-1B petition on April 1.  Companies should have the H-1B fee checks issued early or have funds deposited with their attorneys. Each filing fee should be issued on a separate check and checks should be issued to “U.S. Department of Homeland Security”.  Errors on checks will result in the unadjudicated petition being returned to the sender.

Suggested Timeline for H-1B Filings

I recommend the following timeline for preparing for your H-1B fillings:

Click here to view table.

Do Not Delay

Now is the right time to contact immigration counsel for guidance regarding H-1B filings.  Working with your immigration lawyer early will help to maximize the likelihood that your H-1B petition is selected for processing and will smooth the transition of your new H-1B employees.