This management alert is intended to enable employers to identify any current employees and employment candidates who may require H-1B work permit sponsorship before October 1, 2010. We recommend that employers identify any such candidates as soon as possible, as on April 1, 2009, United States Citizenship and Immigration Services (USCIS) will begin accepting H-1B petitions for the fiscal year 2010 H-1B quota (which begins on October 1, 2009). We anticipate that, like last year, USCIS will receive H-1B requests far in excess of the annual quota within the first days of filing eligibility, in effect resulting in a random lottery-type selection process.  

Background  

There is an annual limit on the number of H-1B petitions that USCIS can approve during the government’s 2010 fiscal year (beginning October 1, 2009 and ending September 30, 2010). The H-1B cap for fiscal year 2010 is 65,000 (of which about 6,800 are reserved for nationals of Chile and Singapore under Free Trade Agreements with those countries). USCIS will begin accepting petitions for FY 2010 on April 1, 2009.  

There is an additional quota of 20,000 H-1Bs that are reserved for persons who hold a master’s degree or higher awarded by a college or university in the United States. This additional quota of 20,000 H-1Bs has historically not been exhausted as early as the general H-1B quota of 65,000. However, we predict that the additional quota numbers will, similar to last year, be exhausted within the first few days that USCIS accepts petitions.  

USCIS applies a separate lottery process to the so-called “master’s cap.” USCIS will apply the random selection process to the master’s cap petitions prior to conducting the regular H-1B lottery. Any master’s cap petitions not selected in the master’s lottery will be eligible for selection in the regular H-1B lottery, effectively being granted two opportunities at an H-1B visa.  

Exceptions  

With some exceptions, current H-1B workers are not subject to the annual cap. Non-cap cases include H-1B workers extending their status, changing from one H-1B employer to another, changing the terms of existing H-1B employment, or filing for a second (concurrent) H-1B position. In addition, foreign nationals seeking to work for an institution of higher education, for a related or affiliated nonprofit entity, or for a nonprofit research organization or a government research organization are not subject to the H-1B cap. For additional information on H-1B cap exemptions, visit (www.immstar.com), click “Immigration Updates,” and choose “Immigration News,” then view “Managing the H-1B Cap.”

Anticipated Unavailability of H-1B Work Permits Means Filing Early

Last year, USCIS announced that it would apply the lottery process to all H-1B petitions received during the first five days of the cap period, even if enough petitions were received to fill the annual quota on the first day of the filing period (i.e., April 1). We do not know how quickly the H-1B numbers will be exhausted for this year, but the most conservative strategy is to assume that the H-1B numbers will be unavailable after the first day of filing (Wednesday, April 1, 2009). Once the H-1 numbers are exhausted, new H-1B work permits will not be available until October 2010.  

Thus, to maximize the likelihood that affected employees will obtain an H-1B number effective as of October 1, 2009, employers must be in a position to file the H-1B application with the government on Wednesday, April 1, 2009. We are starting to prepare “cap-subject” H-1B petitions at this time and recommend that employers begin the process now for any employees or candidates who need an H-1B.  

Persons Affected

The persons who need to file an H-1B include any current employees who hold F-1 student status and who will thus need H-1B status to continue working once their F-1 Employment Authorization (known as Optional Practical Training or “OPT”) expires. In addition, any pending hires should be assessed to determine whether an H-1B will be needed for eventual continued employment, including those who currently reside outside the United States. Further, any current employees who hold TN status and who are beginning the green card process may need to convert to H-1B status.  

“Cap-Gap” Relief for F-1 Students

Under a rule issued in 2008, DHS grants “cap-gap” relief to F-1 students whose employers have filed H-1B petitions on their behalf. Such students will be given a bridge of both status and work authorization until October 1, 2009. This means that individuals currently in F-1 status who are completing optional practical training (OPT) and whose employers have filed H-1B “change of status” petitions on their behalf will have their work authorization automatically extended until October 1, 2009 (the required start date on the H-1B petition), providing that the H-1B petition is approved. Such individuals will not experience the gap in employment eligibility or in status that may otherwise have occurred. If the petition is rejected or denied prior to October 1, 2009, the “cap-gap” employment eligibility ends immediately.  

The 2008 “cap-gap” rule also grants certain students up to 29 months of employment authorization, allowing them as many as three opportunities to apply for H-1B status before exhausting their work authorization. This special provision is know as the “STEM” provision. It applies to students who have pursued programs in science, technology, engineering, and math if their employers are registered for and in good standing with the federal government’s E-Verify program. For additional information about the “cap-gap” rule, see our alert titled “DHS to Eliminate ‘Cap-Gap’ By Extending Employment Authorization for Certain F-1 Students.”

Alternatives to the H-1B Work Permit

In some cases, there may be alternatives to the H-1B work permit. If an affected employee falls into one of the following categories, that employee may not need to file for an H-1B work permit in April:  

  • Citizens of Canada or Mexico who are eligible for a TN visa. Please note, however, that not all H-1B eligible Canadian or Mexican employees will qualify for TN status.  
  • Citizens of Australia, Chile, or Singapore.  
  • The spouse of an L or E work permit holder, who is eligible for spousal employment authorization (EAD).  
  • J-1 nonimmigrants who have at least 18 months of academic training available as of April 1, 2009.  
  • With limited exceptions, H-1B employees who have held H-1B status at any time during the last six years.  
  • A foreign national who is married to a U.S. citizen and has received or will receive an Employment Authorization Document in connection with the pending green card process.  
  • Certain other foreign nationals who may qualify for O, E, or L visas.  

Conclusion  

Employers must act now to begin H-1B processing for candidates or current employees who require sponsorship and who do not meet one of the above exceptions. If an employer misses the filing deadline for an employee who requires H-1B sponsorship, the employee can lose legal status in the United States, including permission to work.