New Restrictions on H-1B and alternative options – June 2020

“When most foreign nationals consider applying for the H-1B visa, their minds immediately think about the regular and advanced degree quotas.’’1 While these two categories are important, as outlined in this SGM article, they are not the only options available to qualified foreign workers to work in the USA.

Many foreign nationals and employers are not aware that the law has a few built-in exceptions to the H-1B cap. A few employers may qualify to be cap-exempt and can file for H-1B petition at any time of the year thereby making it easier for them to employ talented foreign workers and by-pass the cap.

This section provides a summary of these cap-exempt options to help candidates increase their chances of working on an H-1B in the US. There are two main types of H-1B cap-exemptions, as explained in this Marks Gray article: 1) Cap-exempt candidates such as those that were counted by the cap already when they obtained a prior H-1B petition; and 2) Cap-exempt employers. In this segment, we will briefly examine the rules for each classification involving H1B cap exempt employers.

Who are cap-exempt qualifying employers?

The guidance on which petitioners/employers qualify for cap-exempt status comes from American Competitiveness in the Twenty-First Century Act of 2000 (commonly known as AC21) and a June 6, 2006 USCIS field memo. AC21 and the USCIS Memo spell out the three categories of employers who are cap exempt as below.

  • A “Not for profit institution of higher education:” Most common form of institutions of high education is a college or university. Incidentally, most of the colleges and universities in the US are non-profit entities. It is important to note that it is not necessary that you work “for”, but only “at” an institution of higher education to be considered cap exempt.
  • A “Not for profit entity related or affiliated to an institution of higher education:” Most common forms of such H-1B sponsors are research labs, medical hospitals, etc., that are affiliated to colleges and universities.
  • A “Not for profit research organization or a governmental research organization:” There are several establishments in the US that fall in this class. Please note that “not for profit research organization” must meet both the criteria of “not for profit” as well as a “research” entity. To avoid any confusion, USCIS defines a nonprofit research organization as one “that is primarily engaged in basic research and/or applied research.” Moreover, it defines a governmental organization as “a United States Government entity whose primary mission is the performance or promotion of basic research or applied research.”

Benefits of cap-exempt H-1B petitions

There are several benefits to gain from cap-exempt filing. If you are sponsored by a cap-exempt employer, and this is the first time you have gone through the H-1B application process, then working for a cap-exempt employer is a great option because there is no lottery and such employers can submit H-1B petitions all year long. You will not be limited by the quota or any fixed deadlines of H-1B filing. Additionally, you maintain the option to transfer to a new cap-exempt employer thereafter.

However, this may seem like a convenient way, it may be more difficult than you initially think. A few factors as stated below must be kept in mind.

Switching to a non cap-exempt employer

Some applicants may consider filing under a cap-exempt employer while maintaining the intention of transferring to a cap-subject employer at a later stage. The first is that you will be counted against the cap if you decide to make the switch. In other words, you will need to enter the H-1B visa lottery and hope your petition is submitted in either the regular or advanced degree category to transfer. Therefore, there is no way to avoid the cap if you are planning to work for a cap-subject employer at any time during your stay in the U.S.

Identifying the qualifying cap-exempt H-1B organizations

Finding suitable H-1B cap exempt employers based on your skill set does not have to be challenging if you know where to search. There are a few online databases dedicated to H-1B cap exempt employer lists. In the process of searching, however, be careful of organizations that are not specifically on the H-1B cap exempt employers list or a related subgroup. As an alternative, if you believe that you may qualify for H-1B cap-exempt status, please contact one of our agents at August Network so that your chances of success are maximized.

Note: This is a snapshot of one possible work visa option that may be available to potential H-1B beneficiaries who do not get picked in the H-1B cap. We will also talk about other options in a later blogpost. Until then, stay tuned.