Employers are now able to submit new cap-subject H-1B petitions for the fiscal year (FY) 2011 H-1B program. The numerical limitation, or cap, for FY 2010 was reached in December 2009. Beneficiaries of cap-subject petitions may begin employment as early as October 1, 2010. Employers recruiting abroad or who have hired individuals for F-1 “Optional Practical Training” should plan to file petitions with U.S. Citizenship and Immigration Services (USCIS) as soon as possible as it is unclear when the FY 2011 cap will be reached.

Petitions are only subject to the FY 2011 cap if the beneficiary of that petition has not been counted against a cap previously. Thus, “new” H-1B petitions are cap-subject but most petitions for extension, change of employer, or concurrent employment are not affected by the H-1B cap. Further, petitions on behalf of foreign nationals to be employed by institutions of higher education (or related or affiliated nonprofit entities), nonprofit research organizations, or governmental research organizations are not subject to the cap, but if an employer wishes to hire an H-1B employee currently employed at such an organization, the new petition would be cap-subject.

Meanwhile, USCIS has issued guidance on the Employ American Workers Act (EAWA) to employers seeking to file H-1B petitions. EAWA was enacted to ensure that companies that receive funding under the Troubled Asset Relief Program (TARP) or the Federal Reserve Act do not displace U.S. workers. Under the legislation, any company that has received covered funding and seeks to hire new H-1B workers is considered an “H-1B dependent employer.”

An H-1B dependent employer must make additional statements to the Department of Labor (DOL) regarding the recruitment and non-displacement of U.S. workers when filing a labor condition application (LCA). Subsequent to the enactment of EAWA, USCIS revised its Form I-129, Petition for a Nonimmigrant Worker, to include a question asking whether the employer received covered TARP funding.

USCIS said it understands that some businesses who received covered funding may have repaid their obligations and may not know how to respond to the question (Question A.1.d on the first page of the H-1B Data Collection and Filing Fee Exemption Supplement). Companies that have repaid their obligations under the law should answer “No” to question A.1.d. Those that wish to provide further information with the petition to assist USCIS in determining that their status for purposes of EAWA is correct may do so.

USCIS noted that a valid LCA must be on file with DOL when the H-1B petition (with a copy of the LCA) is filed with USCIS. Processing delays or a denial of the H-1B petition may result if the LCA does not correspond with question A.1.d of the H-1B petition, unless any inconsistency is explained to the satisfaction of USCIS. For example, if the LCA includes the additional statements, but question A.1.d is answered “no,” the employer can explain that it had received covered funding at the time of filing the LCA but repaid the obligation before filing the I-129. However, if the employer indicates on the petition that it is subject to the EAWA, but the LCA does not contain the proper declarations relating to H-1B dependent employers, USCIS will deny the H-1B petition.

USCIS additionally reminds employers that EAWA applies only to new hires and not to H-1B petitions seeking to change the status of a beneficiary working for the petitioning employer in another work-authorized category. It also does not apply to H-1B petitions seeking an extension of H-1B status for a current employee to continue working for the same employer.

Demand for H-1Bs is expected to increase somewhat this year, so early filing is recommended. Contact the Seyfarth Businness Immigration Group for assistance with H-1B petitions.

The EAWA guidance is available here.