cap exempt h-1bs

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It’s a sad story when the H-1B cap fills – both for employers and employees.  When the economy was down, the cap filled slowly but in 2013 it filled up, for all intents and purposes, instantaneously.

There is no easy way to extend status as a result of quota exhaustion.  The uncertainty can be unnerving.  Sometimes, though, an employer is cap-exempt.

Exemptions to H1B Cap: 

While the H1B cap is currently set by statute at 65,000, there are several exemptions that raise the actual number of new H1Bs each year.

Exemption for U.S. Master’s Degree: 

Under the law the first 20,000 H1B petitions that are filed on behalf of foreign nationals that have earned an advanced degree from a U.S. institution of higher education are exempt from the USCIS H1B quota. This essentially creates a separate pool of 20,000 additional H1B visa numbers each fiscal year that are available only to those foreign nationals who have earned a Master’s or higher graduate degree from a US institution of higher education. It does not include foreign graduate degrees, and it does not include professional post-graduate certificate programs.  You cannot obtain an educational equivalency for a foreign degree, or combine education and experience to try to meet this cap.  They usually fill slower than the regular cap – at least until 2013.  

Exemption for Cap-Exempt Petitioners

If the employer is:

1 – Universities (any school that is post-high school)
2 – Research institutions (non-profit only)
3 – Government research institutions
4 – Any nonprofit (whether research or not) that is affiliated with a university

then the H-1B cap does not apply.  These employers can file for an H-1B any time of the year, and without limit.  They can do so even if the cap has been filled, because they exist “outside the cap.”

Let’s look at each exemption in detail:

  • Institutions of higher education, as defined in section 101(a) of the Higher Education Act of 1965, 20 U.S.C. 1001(a):
    • admits students who have completed secondary education;
    • is licensed to provide education beyond secondary school
    • provides educational programs for which the institutions award bachelors’ degrees or provide programs of not less than 2 years that are acceptable for full credit toward bachelors’ degrees
    • is a public or nonprofit institution; and
    • is accredited or has been granted pre-accreditation status by a recognized accrediting agency. 

  • Related or affiliated to a higher education institution nonprofit entity:  USCIS states that it is sufficient that a nonprofit entity is connected to an institution of higher education through shared ownership, control or be somehow attached to the higher education institution as a member, branch or subsidiary.  The lawyering comes in figuring out what the affiliation with the university is, and how to substantiate it.
  • It is important to note that public secondary schools do NOT qualify for H1B cap-exemption unless they have a formal affiliation agreement with a college or university. However, the exemption does cover certain professionals employed by a for-profit entity but working at an exempt location, as long as their work continues to serve the core mission of the exempt institution, such as a physicians’ practice group affiliated with and located at a university teaching hospital.
  • Nonprofit research organizations  or
  • Governmental research organizations, as defined in 8 CFR 214.2(h)(19)(iii)(C). A nonprofit research organization is an organization that is primarily engaged in basic research and/or applied research. A governmental research organization is a United States Government entity whose primary mission is the performance or promotion of basic research and/or applied research. 

    Basic research is general research to gain more comprehensive knowledge or understanding of the subject under study, without specific applications in mind. Basic research is also research that advances scientific knowledge, but does not have specific immediate commercial objectives although it may be in fields of present or potential commercial interest. It may include research and investigation in the sciences, social sciences, or humanities. Applied research is research to gain knowledge or understanding to determine the means by which a specific, recognized need may be met. Applied research includes investigations oriented to discovering new scientific knowledge that has specific commercial objectives with respect to products, processes, or services. It may include research and investigation in the sciences, social sciences, or humanities.

It is extremely important that an employer or a foreign national who wishes to seek H1B status under a cap-exempt petition verify that the employer qualifies as an H1B cap-exempt employer under one of the four categories above. In many cases such analysis will be fairly quick (e.g. recognized universities) but in some cases, especially with nonprofit organizations, the analysis may be more complicated and take some care.

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