Friday, April 1, 2016 marks the opening of the filing period for new H-1B petitions to be counted against the annual H-1B quota for Fiscal Year (FY) 2017. H-1B petitions subject to the annual quota, commonly known as the “H-1B cap,” can be submitted on this date for an employment start date of October 1, 2016 or later. To prepare for the FY 2017 H-1B filing period, employers should identify current and future employees who will need H-1B visa status to be legally employed in the United States. Employers should take this action as early as possible to help ensure they are prepared to file all needed petitions on the opening day of the filing period. Foreign nationals who commonly require a cap-subject H-1B petition to be filed on their behalf include individuals currently holding F-1 student visas, individuals seeking to change to H-1B status from another visa status (such as L-1, TN, O-1, or E-3), and individuals outside of the United States.

Overview of the H-1B Visa Program and Annual Numerical Limitation

The H-1B visa program permits employers to employ foreign workers in specialty occupations that require the theoretical or practical application of a body of highly specialized knowledge, such as engineering, science, and computer programming. Federal law limits the number of new H-1B visas that are available each fiscal year to 65,000. Of those 65,000 available visas, 6,800 are reserved for citizens of Chile and Singapore pursuant to the terms of free trade agreements the United States maintains with Chile and Singapore. In addition to the 65,000 H-1B visas made available each fiscal year under the “regular” cap, an additional 20,000 H-1B visas are made available for beneficiaries who have obtained an advanced degree (i.e., a master’s degree or higher) from a U.S. academic institution at the time of filing.

If U.S. Citizenship and Immigration Services (USCIS) receives more cap-subject H-1B petitions than the annual fiscal year limitation, USCIS will conduct a computer-generated random selection process or lottery. The first lottery will be limited to those individuals who possess an advanced degree from a U.S. academic institution. Any H-1B petition for a beneficiary possessing an advanced degree from a U.S. academic institution that is not selected in this first lottery will be included in a second lottery for regular H-1B cap-subject petitions. Cap-subject petitions that are not randomly selected under the second lottery will be rejected and returned with filing fees. Once the number of available H-1B visas is reached for the federal fiscal year, no new cap-subject H-1B petitions can be approved until the filing period for the next fiscal year opens.

H-1B Cap-Exempt Petitions

Not all H-1B petitions are subject to the annual fiscal year cap. The following H-1B petitions are exempt from the H-1B annual limitation: (1) H-1B petitions that are filed to extend or amend H-1B employment for foreign workers who are already in H-1B status, and (2) petitions filed on behalf of new workers to be employed in H-1B status by institutions of higher education or related nonprofit entities, nonprofit research organizations, and governmental research organizations.

Steps Employers Can Take Now to Prepare for the FY 2017 H-1B Cap

The annual fiscal year limitation for H-1B visas was reached within the first week of the filing period for FY 2014, FY 2015, and FY 2016. The number of cap-subject H-1B petitions that will be filed by employers for FY 2017 is uncertain. In light of this, employers should take care to mail all cap-subject H-1B petitions on March 31, 2016, for delivery to USCIS on April 1, 2016. To help achieve that goal, employers should take immediate steps to identify individuals for whom H-1B sponsorship will be needed. Acting quickly in this manner will allow sufficient time for the preparation of H-1B petitions, including the time required to file and receive certification of the Labor Condition Application (LCA).

The LCA, which is submitted online to the U.S. Department of Labor (DOL), is a prerequisite to a properly filed H-1B petition. As part of the LCA, employers must attest that they will pay the H-1B worker the higher of the prevailing wage or actual wage for that position in the geographic area of intended employment. The DOL can take up to 10 days to certify an LCA. Employers should factor this processing time into their planning to ensure timely approval of the LCA and the ability to mail the H-1B petition on March 31, 2016, for delivery to USCIS on April 1, 2016.

With these considerations in mind, employers should take action as early as possible to initiate any cap-subject H-1B petitions.